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.
Owning a company’s stock drives brand loyalty and increases spending.
That’s according to a Columbia Business School study that analyzed transaction-level data from Bumped, a Portland-based fintech that rewards users with stocks from the brands and stores they buy from.
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In further unpacking ownership and spending dynamics, Benzinga spoke with Bumped founder David Nelsen and vice president of corporate communications Amy Dunn.
About: Founded in 2017, Bumped is on a mission to power an ownership economy.
Nelsen founded the company after successfully scaling Giftango, the company known for bringing the digital gift card into the market for major brands like Starbucks Corporation (NASDAQ:SBUX).
“It exposed me to the incentive and marketing space because people that bought the most amount of gift cards happened to be the points/rewards conversion folks,” Nelsen said.
In 2012, Nelsen sold the company to InComm prior to taking five years off to invest in emerging fintech opportunities. During that period, Nelsen thought about ways to fuel engagement in equity markets.
“Through a conversation with Commerce Ventures, I actually struck upon this idea of [adding] this new mechanism of reward into the market, letting a consumer feel the pride of walking into a Target and knowing what it feels like to be an owner in the store you shop at.”
With that idea in mind, Nelsen set out to provide consumers shares of the companies they spend at, working off research by Jaakko Aspara, which showed consumers being more loyal to the brands they own shares in.
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“The [research] was really the foundation of going and starting this company,” Nelsen noted in reference to the dynamics that transpire when a consumer becomes an owner in a company. “Once you’re an owner of Chevron, for example, you’ll feel a little awkward going to Shell.”
How It Works: Consumers, through Bumped’s app, pick their preferred brands. When they shop at those brands using a linked credit card, Bumped rewards shares of stock.
Adding, Bumped is an approved broker deal that doesn't charge commissions. Instead, the company earns money by charging brands that participate in its program. Participating brands choose loyalty rates, also.
“We buy the stock out in the open market, when we need to reward you — say — 25 cents for the coffee that you just bought,” Nelsen said. “We will buy one share of stock, journal that share to you, and then we will keep the remainder. As we do this multiple times, we will sell those remainders back in the market.”
Weekly spending at selected brands jumped nearly 40% as a result of the spending and reward dynamic offered by Bumped, according to the earlier mentioned Columbia Business School study.
“The researchers also studied a stock grant program from Bumped that provided users $5 or $10 stock grants from the following companies: Red Robin, Taco Bell, McDonald’s, ExxonMobil, Chevron, and Yum! Brands,” a release on the study said. “The researchers found that, when users are granted with a certain company’s stock, their weekly spending at those brands increases by 100%.”
Innovation Outlook: Given the commission-free trading revolution and fintech disruptions, access to financial markets has enabled more Americans access to stock market wealth.
In sustaining these trends and prompting consumers to become owners of the brands they transact with, Bumped is looking to expand the depth and breadth of its product offer.
“Over the course of this next year, you’ll see some additional programs start hitting the market,” Nelsen said in a discussion on expanding the company’s existing relationships.
Presently, Bump rewards in such brands as Chipotle Mexican Grill Inc (NYSE:CMG), Netflix Inc (NASDAQ:NFLX), Walgreens Boots Alliance Inc (NASDAQ:WBA), and Home Depot Inc (NYSE:HD). The company aims to add to this list.
“I think this is a foundational change in how people view capitalism and their ability to participate in it.”
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.