Wall Street Wizardry: Secret Options Tech Play Rakes In 100% Returns In 48 Hours!

IMMEDIATE ACCESS: You can find the transcript/video of the beginning of Episode 2 of the Monthly Milestone podcast below.

Nikia Wade: Hi, I am your host, Nikia Wade. Welcome to our second episode of the Monthly Milestone podcast. I would like to welcome none other than Chris Capre. He is our in-house options expert. He has a wealth of information from starting out with Wall Street. as an options educator to hedge fund trainees.

Chris has had quite a bit of success with options, and he has agreed graciously to share that information with you guys, too. So again, welcome back to Monthly Milestone. Chris, I just want to thank you for taking the time out of your super busy schedule to meet with me today. 

Chris Capre: It's my pleasure to be here. 

Nikia Wade: Today we're going to be focusing on your secret options tech play that's racked up over 100% returns in just 48 hours, which is absolutely insane. Those are things that people aspire to do.

But one thing I want to do is start here first, Chris: So most investors, they either take the stocks and swing trade routes, especially when it comes to the hot tech industry. Right now, tech is all the rave. 

But amid all the optimism and mania, why are people so scared of options? And then, let’s pivot into how your approach is different from what the next options expert is doing. 

The Best of Both Worlds

Chris Capre: This is a great question. In some sense, I really understand why some stock traders feel kind of intimidated by options. I felt that initially when I first looked at it. And so I had the same feeling that a lot of traders have. I was like, “Wow, this is very different.” It seems more complex. And at the same time, I just want to say, they are a lot less complicated, actually more simple than people really understand. And if you are trading stocks, I think you should absolutely learn how to trade options and there's very specific reasons for doing so.

So, in terms of the differences, when somebody is trading stocks, it's very straightforward. If you think it's going to go up, you buy. If you think it's going to go down, you sell. And that's it. It's not really that complicated. And it doesn't really matter whether it takes you a week, a month, or a year to get to your target. You make the same amount of money.

But if you're going to be trading stocks (and most people who are tend to be more biased towards the long side than the short side), then you want to be looking at combining options with your stock trading because it can give you other opportunities to kind of generate income that you wouldn't have if you were just trading stocks.

So if you're trading stocks… Let's say you're buying Apple or you're buying Tesla or something like that, the only money that you're going to make on that is the price appreciation. If you buy that stock and if it goes up $10 and you have a 1,000 shares, you'll make $1,000 per dollar gain, or $10,000 profit. And that is pretty straightforward.

Some stocks will have a dividend, but that income (in terms of dividends) only happens a few times a year. You have to be holding the stock at that time to collect it. And if you're not, then it's not available to you. You're not going to profit from that.

However, let’s say you're going to buy Apple at $180 and you think it's going to $190 in a month or so. By adding options on this, particularly a strategy called covered calls, you can say, “I own a thousand shares on this. I want to sell some calls.” Selling calls is a bullish bet on a stock, and it makes money if it goes up. It loses money if it goes down. You can sell calls on top of your long stock position. And it's kind of like saying, “I think it's going to go up, but I don't think it's going to go up past $190 within the next month.”

So if you sell the $190 calls or anything above $190 and it goes up to $190 but doesn't get above that, you get to keep all that profit. The profits from selling what are called covered calls can often be multiples of what you would collect on a dividend if you happen to be owning the shares when you get that dividend.

If I could start my career over, in terms of stock trading, I would have started with options at the exact same time. I would have just learned them both at the exact same time because the incomes that you can add on top of your long stock positions, or even your short stock positions, often can increase your profitability massively.

Sometimes, you can sell calls and it can easily add 10% profit on top of the gains per share. Sometimes, it can be 20%-30% of your total profit on that stock. And so a dividend is almost never going to be 10% of your total profit on a stock trade. And you can do this every single week, every single month on most stocks. It's just a way to kind of add a little bit of alpha on top of your long stock positions.

So for traders who are swing trading stocks. I understand there's a certain vernacular about options that can seem intimidating. I felt the same way, too. And then after a short period of time, I realized this is very easy to understand. And it just gives me a lot more ways to make money than just hanging long or short on a traditional stock way. 

The Biggest Difference

Nikia Wade: I love it. That was the perfect explanation. I think that it seems like some people are scared of trading options. It's very intimidating. They don't know where to begin. Whereas it may seem just very straightforward if they're doing swing trades. But as you said, really it's a hedge of protection because you end up increasing your chances of getting more profits this way in a shorter period of time, too.

Now, here's another thing. So we have people watching and they're thinking, “Okay, there are a million options experts in the world. What sets you apart from… we don't need to call anybody's name now, but what sets you apart from some other options experts in the industry?” 

Chris Capre: Yeah, that's a great question. So the first thing that I think separates me a little bit is the fact that I did work on Wall Street. I did work on the institutional side, both on the buy side and on the sell side, both as a broker on Wall Street and as a trader for a hedge fund.

And when you work at institutions, you get an inside perspective. It kind of pulls back some of the curtain as to what's going on in the markets that you probably wouldn't get if you're just trading retail on top of it. We have a profitable track record. All of our trades that we trade in the Benzinga Options School are listed. You can see every trade: what day we took it, what time of the day we took it, what was the trade, how much we paid for it.

And you can see how every single trade that we've ever taken works out. And we have a profitable track record. It's very clear. We've had a proven track record. You know, we've shared our own personal profit track record since 2020. We've made money in 2020, 2021, 2022, and we're making money in 2023. And so I think that separates it a little bit.

The final thing that I would mention is a certain sense of perspective in the sense of two things. One, I've been doing this for 23 years, and experience matters. You see things over 23 years that you wouldn't see over a five-year period, two-year period, or a 10-year period. I've literally traded multiple markets from the market to commodities to stocks and options. So I've seen kind of like an entire market play between all these forces, and I've witnessed a crash in every one of these markets literally every other year for 23 years. So I have the ability to trade both bullish and in bear markets as well. A lot of people have only grown up with bull markets, so if you came in late 2020, you've virtually only seen a bull market until 2022. So the first time you see a bear market, it's going to be very different from what you're used to.

And on the perspective side, the way I approach the markets is very straightforward. The framework is very straightforward. I am of the belief and this is something I learned in my institutional days, which is that it doesn't really matter whether you are buying and selling for a technical reason, fundamental reason, or economic reason based on sentiment or based on flow. All of those kinds of channels or avenues that people buy and sell a particular stock or commodity or whatever, they all get translated into one kind of core thing and that's order flow. And that's basically the total sum of buying and selling orders. And if it's tilted towards the buy side, then the market's going to go up. And if it's tilted towards the sell side, then the market's going to go down.

And I look at this and ask how we look at the flows and the options market and see where they're tilting towards one side or the other, where the institutional position is. I want to know how the dealers and market makers are set up so that they may have to hedge their positions so that if the market goes up, they'll buy or sometimes they'll be in a position where the market goes up, they'll have to sell.

And so I'm looking at the options world in terms of order flow. And I'm looking at it in terms of the dealers and market makers and where they are positioned on the buy side or the sell side, because that's going to have a huge impact on whether the market goes up. They're going to buy as well, or when the market goes up, they're going to sell. That has an impact upon my trade decision. So I would say that's kind of the main thing that kind of separates us from some of the other people out there. 

100% Profits in Only 48 Hours

Nikia Wade: I can vouch firsthand that Chris knows what he's doing. I just shared with you last week, Chris, that I got feedback from a customer and said, “Hey, tell Chris I said, thank you.” He said he's been following you closely and that every single play that he has mirrored of yours, he's profited. Like Chris just mentioned, he has over 20 years of experience. He's seen all types of markets. This is no person on YouTube that's like, ”Hey, I've got an idea. I can get you rich overnight.” This guy has definitely earned his stripes in the industry.

So I do want to pivot a little bit. You've had plenty of success in the past, definitely a success in the very recent past as well. So there was a recent options play that you did  in the tech industry. It's a microchip company. We're not going to say what that company is right now, but tell the viewers this: Why did it grab your attention? I'm very curious. 

Chris Capre: So in partnership with some developers I've worked with at Benzinga, we have built some proprietary apps that allow us to kind of see what's going on in the flows for the overall market, which could be the S&P 500 or perhaps even a single stock.

We can see the total numbers of calls and puts and how that changes on a day-by-day basis. Are traders getting more bullish by looking for higher targets or are they getting more bearish by reaching for lower targets? And so with these tools, I'm able to see inside the flows and kind of say, hey, where is everybody positioned? Where is the positioning moving towards? Is it moving more bullish? Is it moving more bearish? Is it becoming more consolidated around a particular price point? 

And this particular company had intrigued me because it's attracting a lot of flow and there's a lot of interest in the tech industry right now in the industry, which we're going to talk about in a little bit. But it has been attracting a lot of flows both on the options side and the share side. And any time a stock attracts a lot of flows, there's a chance for a high momentum move. There's a chance for a very clear bullish or bearish move, and I want to take advantage of that. So we had been watching the price action on the charts.

We've been watching the flows, and we felt like after this bull trend, there was a pullback. We felt like that was starting to kind of fade a little bit, and the bullish traders were starting to come in and say, “Hey, we feel this is a really good price to be getting into it.” So we took advantage of that. We got a bullish play on that, and, in two days, we were able to make a little over 100% on that particular trade. 

Nikia Wade: Wow. And so again, guys, this was recent. So I took a look at your portfolio. So the specific play that you did, again, not telling the company quite yet, but you did what's called a long call butterfly play, right? You entered the entry price of $1.61. You entered on June 5. Then, by June 7, the price went up from $1.61 to $3.23, which is incredible. So a little under 101% gain. Some would call that Wall Street wizardry. Again, like I said, I think of you as an options wizard. But can you explain a long call butterfly play and why you picked that specifically to play this company in the tech market? 

Chris Capre: Yeah, this is an excellent question. So a long call butterfly, also known as an even butterfly, is what we call a three-legged options strategy. And so it consists of three different strike prices and different types of options that we're doing at that. So a one-call butterfly is basically expressing that we're bullish, but we're bullish up to a certain point. We think that if the market gets to this price, that it'll kind of stall. We're bullish from $150 to $160. But if it gets to $160, we don't think it's going to keep on pushing. We think the market's going to kind of consolidate. And the reason why we thought that was because we had noticed that the bullish traders had a high concentration of calls at $160. But then beyond that, there was just no interest, which tells us, this is where the option traders think the max move is to the upside. 

And so we thought this is a perfect opportunity for us to do a long call. Butterfly. So a long call butterfly is where you’re bullish. I'm going to buy some calls here. Let's say 10 calls, and then I'm going to sell 20 calls above that. Now, if I buy 10 calls, I have to pay for that, right? That's what we call a debit. So if I buy a call, kind of like when I buy car insurance, I have to pay that. But if I'm the insurance company and I sell the insurance, I get paid for that. So it's a chance for me to kind of take both sides of the trade, for me to be the insurance buyer and the insurance seller within the same option trade. 

So let's say I'm buying 10 calls at $150, right? Well, then I'm going to sell double the amount of calls at $160 where I think the market won't get above. And because I'm selling that, I'm going to get credit for that. So instead of just buying a single call or just buying some long calls at $150, which I have to pay out for, by selling some above, I'm going to get a credit for that. So it makes my bullish play cheaper to get bullish at $150.

And, then, the third leg on a long call butterfly is what we call kind of insurance. If the stock overshoots $160 beyond my expectations, then, I have insurance above that allows me to reduce some of my losses by having another bullish set of calls above that. So it's like long 10 calls, short 20 calls, another long 10 calls, and it comes out to net long, 20 calls with this kind of range of strikes that I can make money.

So I can make money from $155 to $165, but then anything below $155 or anything above $165, I lose money. And that amount that I lose is fixed. That's not ongoing. It's just a fixed amount. And so that's the trade we chose for it because we were bullish on it. But up to a certain point and beyond a certain point, we were no longer bullish and we felt it would stall there. And that's exactly what it did.

The market was going up for a little bit. It pulled back into a zone we really liked, and we decided to get bullish from this point. We think it could go up to like $160. And then we said, okay, let's just see what happens. So literally, that day, it starts to bounce. The next day, it goes up to $160 and we're like, okay, we can close out right now for 100% profit. Let's do it!

Why wait a few more days to see what happens? That will leave some of our profits on the table that would expose us to risks that we couldn't quantify. Maybe something in the news comes out on the stock that's bearish. And so we said we made some great money in two days. Let's take our profit, move on to the next trade. 

Nikia Wade: Smart! I want to address that fear that many people have about options. But it seems like you have really found a strategy where you can cover people on all ends to make it one of the safest ways to trade options. Would you agree with that? 

Chris Capre: Yes, and the one thing I didn't mention when we were talking about covered calls, which is kind of an important thing for people to understand, is that... If you're bullish on Apple and you think Apple is going to grow to $200 by the end of the year, you may buy it at $180. Well, whether it gets to $200 in a week, in a month, or a year, you make the same amount of money. There's no more money to be made.

With options, though, you can make money. You can make more money if it gets there faster. Or you could take another approach and say, you know what? I think this is going to take a little bit longer than people expect.

And so you can take the other side and say, you know what, I think it's going to be there in a month. I think it's going to be there in three months. And so you can make money, whether it gets there faster or you can make money, whether it gets there slower.

And so options give you, no pun intended, options. More options are ways to make money on some of these stocks that you're trading in. It allows you to also control risk in ways that you couldn't with the stock if you're a long Apple stock. Let's say it goes up to $200 and you want to hold it for a year to $250, but you're worried over the coming quarter the results might not be that great and it might pull back to one $180.

Well, then, if you're just a stock trader, you're kind of stuck in that. You have to say, hey, I have to sit through this pullback or I have to take profit and hope that it does pull back at a cheaper price and get in with options. You can say, you know what, keep your long stock position. You can take a short-term bearish bet via options on that. And if it goes down, even though your stock position lost money, your option position will gain money so you can make money while you're long, stocks are pulling back. And that's the beauty of options. They give you more ways to control risk, more ways to make money than you can when you're just kind of trading stocks in a very vanilla fashion. 

The Tech Stock Play Earning $3,000-$5,000 in Days 

Nikia Wade: That sounds like “The Best of Both Worlds.” You get the safety, but also the real potential to make quite a bit of profits and earn a little bit of time. So outside of the microchip company, there is another recent opportunity that you just cash in with. So we know with the microchip company you made a little over 100% in profits.

And then there was another familiar household name in the tech industry where you made a solid 76% profit, too. But before we get into that second one, I would like you to go ahead and tell the viewers what was the stock that you played that could have made them an additional  $3,000 to $5,000 in just days? That one that hit over 100% in just two days. What stock did you trade? 

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