How I was able to turn a $200 dollar investment into $13000 for one of my clients using options to invest in small cap energy stocks.
The ability to increase the returns of your investment through promoting the company to other investors is called shareholder activism and has become one the most powerful market influences since the GME event. As investors flocked to online forums such as Reddit, fintwit and stocktwits for information on potential opportunities to quickly turn a small investment into a nice sum of change.
With almost a million members and over 10k users online during market hours, having an account that is well known, posts make it to the top of the sub and stay there as tens of thousands of potential investors actively looking to buy options based on posts in the forum.
After investing for 6 years and specializing in options for the last three, I was able to quickly generate a reputation for making lengthy, technical but highly successful recommendations for the massive new influx of users ready to deploy capital.
By including specific contracts for calls or puts with a strike price, date and symbol unique to my post- I could monitor the trading volume before and after the post with surprising accuracy. Because the purchase of calls unhedged can result in a rising price per share of the entire stock, if enough people hold the calls until they get exercise in the money- only a tiny investment by a lot of people can cause small companies to rapidly appreciate in value as the increase in value of the calls give investors more money to re-invest in the stock. Furthermore the ability for short sellers to cover their positions and hedge their positions is limited and the sudden purchase of common shares or call to prevent being squeezed further drives the price of the stock up.
The increase in cash from new investors give the company a better ability to pay down debt and buy back shares further pushing the price up and turning the original investors into a marketing team that will move mountains to get the rest of Reddit to follow in their footsteps.
Nothing leads to higher prices like higher prices. The more times people look to see that the company posted about increased substantially since the last time they checked, the more confident they become in my recommendations. As the number of successful investors I post about increases and people make money from them, the massive amounts of money made gets re-invested at a growing rate.
At this point the combined value of portfolios that mirror my investments is likely approaching 10 million USD. More on that number later. Being able to take positions in small stocks with options knowing an army of self directed accounts will help me and each other secure gains and support research driven investments.
https://youtu.be/QeuPYv-O_rA
