Trade Breakdown: My Lucky Crypto Puts Play

by | Mar 6, 2023

As much as some traders don’t like to admit it, luck plays a major role in the stock market…

In a recent letter, I talked about the difference between getting lucky and skillfully winning in the stock market.

You see, it’s an unavoidable fact that traders will occasionally get undeservedly lucky. 

Sometimes, the stock they’re trading goes up (or the chart they’re shorting goes down) for a completely different reason than their trade thesis.

That said, you can’t get lucky if you’re not prepared (more on that later)…

I didn’t know that this exact issue would come up in my own trading so soon, but here we are…

(We’ve all heard about the “Luck of the Irish” … but what about the “Luck of the Jewish?!”)

Today, I’ll break down how I made over $30,000 profit overnight by buying puts on one of my favorite stocks to trade.

Then, I’ll explain how luck played a role in my win … and why I couldn’t have been lucky if I wasn’t prepared. 

Keep reading and I’ll show you…

Why I Bought Crypto Puts

Last Thursday, I bought puts on the ProShares Bitcoin Strategy ETF (NYSEARCA: BITO).

For anyone unfamiliar, BITO is my favorite way to trade crypto volatility because it’s a fund that tracks Bitcoin (BTC) directly. 

And even more critically, it’s optionable. (It’s also responsible for my biggest trade of all time!)

So, why was I shorting crypto on Thursday?

Last week, I was zeroing in on Tesla Inc. (NASDAQ: TSLA) as the company held its annual “Investor Day.”

I had actually bought puts on TSLA prior to the event, but I didn’t have a strong enough conviction and ended up closing the position out before the curtains were drawn.

Then, I had to painfully watch TSLA get smoked as the event disappointed traders and investors.

If You’re Going to Trade Crypto… Watch This Demo First

It reveals exactly how to tell which cryptos to buy.

And more importantly, which ones to keep your hard-earned money away from.

At that point, I was pretty upset with myself that I hadn’t held my TSLA puts. Then, I was looking for a way to make up for my missed opportunity…

WARNING: Trying to “make up” for missed opportunities can lead to revenge trading! Don’t do what I did, avoid revenge trading at all costs!

TSLA is closely linked with crypto because CEO Elon Musk is a huge supporter of digital currencies. And I thought that TSLA’s woes might spill over into the crypto charts…

In hindsight, this wasn’t a good reason to put the trade on. I was “revenge trading,” but soon enough, I got lucky…

How Luck Played a Role in My Win

By Thursday afternoon (just hours after buying my puts), BTC had dropped more than 4% as major crypto bank Silvergate Capital Corp. (NYSE: SI) announced it would delay its annual report and report further losses.

Now, I could pretend to be a psychic genius here, but that’s simply not the case…

While I’ve been extremely bearish on crypto (and SI specifically) for some time now, I couldn’t have predicted such an immediate negative headline. 

My overall bear thesis against crypto wasn’t lucky, that came from months of research. (I’ve been warning you about SI’s problems since early January.)

But I can’t hide that the timing of this play worked in my favor due to factors completely out of my control.

That said, I never would’ve had the opportunity to get lucky on this play had I not prepared myself through countless hours of due diligence.

And this is the point I wanna drive home today…

By studying hard and doing proper due diligence, you’ll set yourself up for success in a number of ways.

You can conventionally nail a trade with an airtight thesis (which is ideal), but you can also get lucky (not preferable, but acceptable). 

However, getting lucky is impossible if you’re not prepared.

Had I not done months of research on the lack of solvency in crypto, chosen an appropriate strike price and expiration date, and known the connection between BITO and the broader markets … I never would’ve had the opportunity to get lucky on the timing of this trade. 

Was I totally correct about everything in my thesis? No. 

But I was right about the direction and the range, which allowed me to get lucky on the timing.

I closed this trade out first thing in the morning on Friday, turning a starting stake of $55,751.85 into $86,717.04 for a profit of $30,795.19 … in less than 24 hours!

Final Thoughts

The moral of this trade is to always be researching, doing due diligence, and paying attention to the headlines.

By doing so, I was able to take advantage of lucky timing and find myself in a killer trade. (I’ll take it!)

I’m not saying you should try to get lucky. On the contrary, you should work toward making profitable trades with a strong thesis behind them.

But you won’t get lucky, or make five-star plays, without working hard and studying.

Meet Mark:

Mark Croock is a former accountant who after studying under Millionaire Trader Tim Sykes turned his small account into $4.11 million in trading profits by applying Tim’s strategies to options trading.

He started Evolved Trader to pay it forward and help other traders learn how to leverage options


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