27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Market volatility has returned in 2018, and that could be good news for online brokers. In fact, one analyst has upgraded two popular online brokers and says there could be earnings beats on the horizon.
The Analyst
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
Keefe, Bruyette & Woods analyst Kyle Voigt upgraded TD Ameritrade Holding Corp. (NASDAQ:AMTD) from Market perform to Outperform and reiterated his price target of $66.50. He also upgraded E*TRADE Financial Corp (NASDAQ:ETFC) from Market Perform to Outperform and reiterated his $61 price target.
The Thesis
There are a number of positive catalysts ahead for online brokers, according to Voigt. First, given the current yield curve, he said net interest margin guidance is likely on the conservative side. Voigt said both TD Ameritrade and E-Trade are well-positioned to benefit from a general environment of inflation and rising rates.
In addition, Voigt said healthy volatility in the market is also good news for profitability.
FREE REPORT: How To Learn Options Trading Fast
In this special report, you will learn the four best strategies for trading options, how to stay safe as a complete beginner, a 411% trade case study, PLUS how to access two new potential winning options trades starting today.Claim Your Free Report Here.
“More recently, we've seen a return to more normalized equity market volatility and should this persist, we believe that there could be upside to our numbers, even in a scenario where margin balances decline,” Voigt said.
The two stocks’ valuation multiples relative to the S&P 500 have compressed significantly in 2018, including a 16 percent decline for TD Ameritrade and a 12 percent decline for E-Trade. Voigt said this decline is unwarranted and could limit additional downside.
E-Trade appears to be a string buyout target, and Voigt said TD Ameritrade could boost its EPS by double-digits if it decides to pull the trigger on a deal for E-Trade.
Price Action
TD Ameritrade stock traded higher by 1 percent Tuesday, while E-Trade shares climbed 3 percent.
Related Links:
A New Combatant In The Online Brokerage Price Wars: Overstock To Offer $1.99 Trades
One Crazy Week In The Stock Market
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.