The Smartest "Work-From-Home" Trade Today

You're receiving this email as part of your subscription to Lou Basenese’s Trend Trader Daily. [Unsubscribe](. [Trend Trader Daily]( The Smartest "Work-From-Home" Trade Today Tuesday, January 25, 2022 Stocks staged an incredible comeback yesterday. In the final hour of trading, the Nasdaq shrugged off a loss of nearly 5% and closed with a small gain. That’s happened just five times in history. But you know where you’ll never see a comeback happen? In the dreaded “work-from-home” stocks I’ve been warning you about repeatedly (see [here](, [here]( and [here](). The latest proof came last week, when internet-connected bike darling, Peloton Interactive, Inc. (PTON), allegedly halted production due to non-existent demand. Mark my words, it won’t be the last “work-from-home” stock implosion. In fact, today I have a new one for you. But first, let’s close out some winning positions so we can roll our profits into this new trade. (Wait, you’re not booking these gains with us? That must mean you’re not a Trend Trader Pro member. What are you waiting for? Sign up for your risk-free trial [here](). Spinning Out of Control I’ve never hidden my disdain for Peloton, which is essentially an overpriced stationary bike with an internet connection. And I’ve never hidden my embarrassment over purchasing one. But last week, after using it just twice in a year’s time, I finally gave it away. (I really did use it just twice. I verified that when I cancelled my monthly membership.) Little did I know that “cleansing” myself of my Peloton would perfectly coincide with millions of investors doing something similar: cleansing themselves of their Peloton stock! Like burning sage in a new home, investors lit their Peloton shares on fire last week, causing the stock to crater nearly 30% on January 20. While it might hurt to fathom a single-day loss that big, it hurts even more when you realize Peloton shares are down an eye-popping 85% from their 52-week high. I’m not surprised, though. When hype takes hold and demand finally wanes, inflated valuations no longer remain justifiable. Of course, we didn’t know precisely when this day of reckoning would come for Peloton. But we knew that it would happen. And that’s why we used long-dated put options to position our portfolios to profit from the situation, instead of simply selling the stock short. Fast-forward to today — and our Peloton January 20, 2023 $60.00 puts are up a staggering 368% in less than 100 days. Go ahead and sell the remaining contracts to bank the profits. While you’re at it, it’s time to cash-in on three of our other profitable options trades. Then we’ll put our profits back to work in a new trade. Robinhood’s Red Ink Stocks aren’t the only asset correcting right now. So are cryptos, which is unfortunate for Robinhood Markets, Inc. (HOOD), the fad-chasing no-cost broker. Shares are down over 65% in the last three months alone… and down more than 85% from their 52-week high. I’ve been warning you about this stock since before it went public (see [here](). My biggest issue since Day 1, apart from valuation? The company’s identity crisis. As I wrote: “In a single quarter, Robinhood went from being a stock-trading company to a crypto company… it’s just riding one fad to the next, and aiming to generate as many commissions as it can from each one.” Sorry. Fad-chasing doesn’t work for investors, and it certainly doesn’t work for companies. No matter how hard management tries to convince us otherwise. The net-net of this Covid-19 darling turned stock-market dud? Our Robinhood January 20, 2023 $20.00 put options have increased 236% in price. Go ahead and bank the rest of those gains today, too. But wait, there’s more. Zoom Boom and Bust While you’re at it, sell your remaining Zoom Video Communications, Inc. (ZM) January 20, 2023 $155.00 puts. You’ll pocket a nice 264% gain here, as everyone cringes at the thought of another Zoom call, and the company scrambles to keep growing. Last but not least, we need to lock in gains from our trade in the Direxion Work From Home ETF (WFH). Remember, this ETF holds a basket of 40 stocks tethered to the “work-from-home” trend, including the major ones crashing right now, including Zoom and DocuSign. As I originally told you, “Thanks to the fact that the ETF employs an equal-weighting methodology instead of a market-cap weighting methodology, the impact of individual blowups is more pronounced.” And that’s precisely what’s happened in the 25 days since we purchased our bearish options — the April 14, 2022 WFH $68 puts. In less than a month, as the “work-from-home” trade has imploded, they’ve increased in price nearly 200%. But instead of simply celebrating all of our gains, let’s position ourselves for even more profits. Here’s how… The Riskiest FAANG Stock of All? Nearly two years ago, during an appearance on Fox Business, I declared the FAANG-trade officially dead. No longer could investors simply buy this basket of stocks, close their eyes, and profit handsomely. Instead, they needed to become selective, allocating investments to the companies in the group not just with true platforms, but with the ability to easily expand and profit from new markets. Think Apple Inc. (AAPL) and Amazon.com (AMZN). But not Netflix, Inc. (NFLX), the online streaming giant, As it turns out, I was right. Netflix has been the worst-performing FAANG stock over the last two years. And it’s only getting worse. In fact, last week, the company reported extremely disappointing results. In short, subscriber growth is getting harder and harder to come by. Shocker! (Kidding.) Management wants us to believe that the situation is temporary. In a video call following the results, CFO Spencer Neumann said it was tough to pinpoint why net new subscribers are plunging. But he pinned the blame on a “COVID overhang” after two years, as well as some “marginal impact from competition.” Newsflash: it’s definitely a Covid overhang. Consumers can’t keep binging forever. And nice try downplaying the competition. Netflix’s actions — i.e., spending more and more on original content — underscores the true threat posed by its competitors. If you’re only worried about “marginal” competitors, you don’t go from spending about $7 billion on original content in 2016, to $17 billion in 2021. Just saying. Shares are already down 40% over the last three months. But we’ve seen what happens — and we’ve profited from it — when other work-from-home stocks finally implode. The losses don’t just continue, they accelerate. I’m convinced the same is about to unfold for Netflix, as the company’s growth woes are far from over. And that makes now an opportune time to position our portfolios to profit from yet another stock collapse. So don’t delay! TREND TRADER PRO TRADE OF THE WEEK [ ACTION TO TAKE ] FOR TREND TRADER PRO READERS ONLY [> Learn more]( Ahead of the tape, [Lou Basenese] Lou Basenese Founder & Chief Investment Strategist Copyright © 2022 Trend Trader Daily, All rights reserved. You signed up on []( Our mailing address is: Trend Trader Daily 301 S. Perimeter Park Dr. Suite 100 Nashville, Tennessee 37211 [Update Subscription Preferences]( | [Unsubscribe from this list]( RISK NOTICE: All investing comes with risk. That includes the investments teased in this letter. You should never invest more than you can afford to lose. Please use this research for the purpose that it's intended — as research only. You should consult a professional financial advisor before ever taking a position in any securities you see herein. SECURITY HOLDING NOTICE: Although we are never compensated from any companies for coverage, you should be aware that Trend Trader Daily, its authors, its owners, and its employees may purchase, sell, or hold long or short positions in securities of the companies mentioned in this communication. While authors might actively transact in the securities mentioned, they will always have a net position that is consistent with the position set forth in our research reports, letters and updates. DISCLAIMERS: The work included in this communication is based on diverse sources including SEC filings, current events, interviews, corporate press releases, and information published on funding platforms, but the views we express and the conclusions we reach are our own. As such, this content may contain errors, and any investments described in this content should be made only after reviewing the filings and/or financial statements of the company, and only after consulting with your investment advisor. Actual results may differ significantly from the results described herein. Furthermore, nothing published by Trend Trader Daily, Inc should be considered personalized financial advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. Trend Trader Daily is an independent provider of education, information and research on publicly traded companies, and as such, it accepts no direct or indirect compensation from any companies or third parties mentioned in any of our letters, reports or updates.