Cheddar Flow is simply the best platform for options traders. I was introduced to it by a friend who encouraged me to do a free trial and I have been very impressed so far. It has a very clean UI, it is real-time and is very affordable.
In this post, I wanted to share how Cheddar Flow helped me 5X my portfolio in a little more than 2 weeks by playing earnings. But before I start, here is a screenshot from my E-Trade broker statement with all my transactions:
- Three Big call orders (greater than $200K and up to $2.1M) came in implying that smart money was at play.
- Volumes for those orders were way above open interest indicating that these investors might have had good reasons for pouring a lot of money into a fairly untouched position.
- These call orders were entered at roughly the same time which could indicate that they were part of the same big order and were broken up into multiple orders for technical reasons, suggesting again that it came from a bullish institutional investor.
- All these calls were in or close to at the money which is a very common pattern with institutional investors.
- Finally, these orders came in 10 days before PINS was going to report earnings which suggested that maybe someone knew something about these earnings and was willing to bet more than $2.5M on a beat.
Based on that data and more research I did about Pinterest, I concluded that someone with deep pockets was going to play earnings on the BUY side. As a result, I decided to follow them and invested $1k into 11/20/20 calls at a $26 strike price.
On July 31st, PINS did beat earnings, the stock price gapped up and I achieved an almost 3x profit on my calls thanks to Cheddar Flow.
The same story happened to me again with Bausch Health (BHC) and Farfetch (FTCH). I originally knew nothing about these companies but I was able to identify these same bullish signals for these two stocks on the platform.
After doing a little more research about the two companies, I was able to confirm why they were likely to beat earnings and was able to achieve a 350% profit on BHC as well as an 84% profit on FTCH in just a few days by following the same strategy I used for PINS.
What I learned
Cheddar Flow is an amazing platform to identify bullish and bearish signals on specific stocks and capitalize on those signals by buying and then selling Call/Put options. It is very powerful if you are willing to put in the time to learn about options and can leverage it as part of your own trading strategy.
However, it is definitely not a “Get rich overnight” type of platform (please let me know if you find anything like that =)). It will take you some time to figure out, you will probably make a few mistakes along the way (false positives happen) and eventually you will need to come up with your own strategy but if you are willing to learn, Cheddar Flow could quickly become an essential tool in your trading strategy.
I was able to 5x my portfolio and I would not have been able to do it without this awesome platform. Check them out for free.