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.
Over the past several years, and even months, a spate of high-profile cybersecurity breaches have turned attention to investments focused on the cybersecurity theme, allowing some exchange traded funds (ETFs) to make names for themselves.
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Investors looking to add some leverage to the cybersecurity trade can consider the Direxion Daily Cyber Security & IT Bull Shares (NYSEARCA:HAKK). The Direxion Daily Cyber Security & IT Bull Shares debuted nearly two years ago as the first leveraged ETF dedicated to cybersecurity stocks. While Direxion, one of the largest issuers of inverse and leveraged ETFs, is often associated with triple-leveraged products, active traders considering HAKK should note this ETF is a double-leveraged product.
Specifically, HAKK looks to deliver twice the daily returns of the ISE Cyber Security Index, one of the most widely followed gauges of cybersecurity stocks. That index is comprised of both domestic and foreign companies across the industry, including cyber security infrastructure providers, cyber security service companies, and companies for which cyber security is a key driver of their business, according to Direxion.
An Ideal Situational Play
As is the case with most leveraged ETFs, HAKK makes for an ideal play for active traders when earnings season commences. Second-quarter earnings season kicks off in earnest this week so risk-tolerant traders looking to capitalize on potential upside from well-known cybsersecurity names, such as FireEye Inc. (NASDAQ:FEYE), Check Point Software Technologies Ltd. (NASDAQ:CHKP) and Splunk Inc. (NASDAQ:SPLK), should put HAKK on their radars.
In addition to being a credible earnings play, HAKK merits consideration on news of major cybersecurity, an almost weekly occurrence. Just look at the recent spate of ransomware attacks, including the “WannaCry” attacks in May which hit roughly 150 countries, including China, Russia, and the United States.
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Nibbling At HAKK
The aforementioned trio of FireEye, CheckPoint and Splunk combine for about 12 percent of HAKK's weight.
Some data points suggest traders have recently been embracing the leveraged cybersecurity ETF. For example, HAKK has averaged daily inflows of almost $82,000 over the past month, according to issuer data.
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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.