Consumers Are Feeling Unexpectedly Jolly This Month
A recent report by The Conference Board says Americans are feeling happier about their money this month. The Consumer Confidence Index jumped from 101 to 110.7, way higher than expected. This index measures how people feel about their money now and in the next few months. It also tells us what people think about the overall economy.
In December, the index showed that fewer people think there will be a recession in the U.S. in the next year. The chief economist, Dana Peterson, explained that this boost in confidence is because people are more positive about current job opportunities and business conditions. The report indicates that consumers are especially optimistic about the economy in the next six months, reaching levels not seen since July.
The Expectations Index, which looks at what people expect in the future, improved from 77.4 in November to 85.6 in December. This suggests that people are feeling better about how things will be six months from now. The surveys also reveal that people are less worried about interest rates going up and are more hopeful about stock prices. According to The Conference Board, consumers believe inflation will go down, and they’re planning to spend a lot soon.
Survey: Essential Items for a Merry Christmas
A new study from Statista Consumer Insights showed that a Christmas tree is a “non-discretionary” item for 55% of U.S. residents.
The study also found that half of Americans believe Christmas music and movies to be indispensable, as well.
Presents come in fourth place, with 49% of Americans feeling that they’re necessary.
Take a look:
CFU TRADING STRATEGY FOR THE WEEK:
The Art of Call Debit Spreads in Options Trading
Let’s explore the powerful strategy known as the call debit spread—a tactic designed to leverage bullish market sentiments while managing risks effectively.
Understanding the Call Debit Spread:
At its core, a call debit spread involves a two-fold process. You initiate the strategy by buying a call option with a lower strike price, anticipating upward price movement. Simultaneously, you sell another call option with a higher strike price, aligning both options with the same expiration date. This dynamic duo creates a bull call spread, and here’s why it’s worth considering.
Advantages:
The primary allure of call debit spreads lies in their ability to offer a balance between risk and reward. By combining a long call with a short call, you mitigate the cost of the trade, resulting in a defined risk and capped profit potential.
Risk and Reward Dynamics:
With a call debit spread, risk is limited to the initial debit paid to establish the spread. Maximum loss occurs if the underlying asset closes below the lower strike at expiration. Conversely, the profit potential is capped at the difference between the two strike prices, minus the initial cost.
Ideal Market Conditions:
These spreads thrive in bullish markets where moderate upward movement is anticipated. This strategy enables traders to participate in market growth without deploying substantial capital, making it an attractive option for those seeking a balanced approach.
Key Considerations and Risks:
- Keep an eye on implied volatility, which can influence option prices.
- Be mindful of time decay (theta) as it impacts the profitability of the strategy.
- Understand the breakeven point to assess the probability of the trade turning profitable.
Exit Strategies:
Knowing when to exit is crucial. Consider closing the position if the underlying asset hits your target or if the trade deviates from your expectations. Take into account factors like time decay and volatility changes when making exit decisions.
Call debit spreads offer a nuanced strategy for navigating bullish markets, presenting a well-defined risk profile while preserving profit potential. As with any trading approach, thorough research and an understanding of market conditions are imperative.
Call Debit Spread Profit Profile
Here is the profit profile for a Call Debit Spread on AON
Note how we have a limited and known risk and profit. This hedging strategy is powerful and allows us to generate profits on a consistent basis for our members at CFU.
How is this possible? Because remaining hedged at all times allows us to roll when necessary, regardless of how far the stock moves against us. It is our secret sauce.
What is a roll? Well, come join us at CFU to find out in detail!
CFU Trading Results From Last Week:
These are profits we locked up from the week ending December 22:
$TMO 30%
$RCL 12%
$GOOGL 74%
$AVB 39%
$ON 34%
$TER 33%
$TSLA 97%
$NVDA 93%
$TSLA 98%
$SPX 155%
$GOOGL 84%
Member Results:
This post from our discord says it all:
CLOSED AND REALIZED PROFITS 💰
If you haven’t joined CFU yet, what is stopping you?
Here, I’ll throw you a deal, 25% off your first month so you can ease in, see the quality of our trading services and the results we will produce for you within 4-6 weeks. You can cancel at any time. But you won’t because the edge you gain by trading with us is second to none.
PROMO: CFUINSIDER25
Look forward to seeing you inside,
Stephen
Founder, CFU
