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.
Last Friday, CCTV's Michelle Makori spoke with McGladrey's Chief Economist Joe Brusuelas about the global market selloff.
Why Are We Seeing A Global Selloff?
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Brusuelas explained that what the market is seeing is “a reaction to the secular slowdown in overall Chinese growth, and concerns about a much more pronounced slowdown in overall global economic growth.”
The expert assured, while the U.S. economy is doing “fairly well, it is widely understood, at least in financial circles in the United States, that China is the other economic pillar in the global economy.” He noted, if China cannot pull out of this global economic deceleration, there is a concern that this could generate a spillover effect, especially into Europe, but eventually, into the United States as well.
Is There A Way Out For China?
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With almost every economic indicator dropping in China, the economist explained that for things to start stabilizing in the country, “Chinese fiscal and monetary authorities are going to have to get much more aggressive. Simply allowing the Chinese yuan to adjust another 3 percent downward over the next year is likely not to be sufficient,” he added.
However, the expert also noted that the China problem should not be exaggerated, and what investors are seeing now is “a combination of an overreaction to what’s happening in China, very thin markets in the West […] and some concern that the United States Federal Reserve may get very aggressive on their interest rate hikes.” Moreover, Brusuelas expounded, even a 25 basis points hike should not lead to further unwinding in the global financial markets.
Chinese Financial Markets And Their Bubble
Back to Chinese financial markets, the expert noted there’s “clearly a bubble” there. “The Chinese fiscal authority clearly stoked that bubble to increase revenues revenue into the local prefix [and], it worked until it didn’t,” he explained.Notwithstanding, the crucial point will come when the global economy sees the effects of a spillover, Brusuelas concluded. Authorities are always going to talk about a soft landing, but as China transitions from being an emerging market and export-oriented economy to a mature market based on an inward-oriented model (and problems in the real estate market persist), the landing is unlikely to be soft.
To conclude, the analyst explained that the economy will just have to adjust to the new growth rates, around 3 percent, as China’s economy becomes more established.
Shares of the iShares FTSE/Xinhua China 25 Index (ETF) (NYSE: FXI) are down roughly 6 percent on Monday trading.
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.