SEVEN-DAY WEED CONTRACTS

SEVEN-DAY WEED CONTRACTS:

How to Get Rich as America Goes Green

Seven-Day Weed Contracts:

How to Get Rich as America Goes Green

Marijuana stocks are some of the most volatile things you can buy today. It's amazing how quickly they can move. Buy today and you could be looking at a big profit just a few days later. Or you could be facing a loss. Now, I know marijuana is a very sensitive subject... but I don't care about any of that. As a trader, and your Dollar Trade Club guide, my only concern is making money. And the pot market's ups and downs provide plenty of ways to do that! One of the simplest strategies is to use seven-day "weed contracts." You place the trade, watch the markets and then get out seven days later -- hopefully with big profits. It sounds crazy, I know. And truth be told, it can be a little risky. But you're in control of that risk the entire time... while putting less money on the line than you would with stocks. Even better, just a few big wins could easily overcome your losses. You've probably guessed by now that the secret is to use stock options. And since investors tend to be irrationally scared of these moneymakers, let's start with why they're nothing to fear!

Explore Your Options

A stock option -- or just an option, for short -- is a tradable contract that gives you the right but not the obligation to buy or sell a specific underlying financial instrument at a specific price within a set period of time. That's the technical definition, at least -- though it probably sounds like gibberish to you. Really, it just comes down to this:

? Stock options trade alongside stocks on major exchanges. In fact, you can buy them from just about any stockbroker ? A stock option's price fluctuates just like a stock's, meaning that you can buy one now and sell it either at a profit

or loss down the road. An option's price is called the premium ? E very option is tied to a specific stock, known as the underlying stock ? E very option has a strike price, a fixed dollar amount that represents where investors think the underlying

stock's price will go ? A n option's premium (price) at any given moment is dependent on how the option's strike price relates to the

underlying stock's current price

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S E VEN -D AY WEED CO N T RAC T S

? There are two types of options -- calls and puts. A call option's price rises when its underlying stock's price rises. A put option's price rises when its underlying stock's price falls. So calls and puts allow you to profit no matter which way a stock's price goes

? Every option has an expiration date -- a set day when the option becomes worthless. Most options expire on the third Friday of any given month, though there are also weekly options. But it's always on a Friday at 4 p.m. (unless Friday is a holiday, in which case Thursday is expiration day).

So then, the idea behind seven-day week contracts is pretty simple.

You buy call options on marijuana stocks, expecting them to go higher. You sit on the trade for seven days.

If the stock skyrockets, you sell your options for a profit. If it only gains a little money or even falls, you sell seven days later for a profit or loss.

To get started, you'll need a stock brokerage account. If you've never traded options before, you may need to apply for permission.

You'll just be buying straightforward call options, making the application process a little simpler.

But if you've never traded options before, you might be wondering if it's worth the hassle.

So let me tell you why it is!

Unleash the Power of Leverage

If you're confident a stock price is going to move higher, you could just buy the stock outright. If the price rises, you'll see a profit.

But the beauty of stock options is that they magnify your gains!

It all comes down to leverage. Stock options are leveraged instruments -- meaning they're low-cost investments that have oversized reactions to small price moves.

Each option you buy technically covers 100 shares of stock. But they cost a fraction of what you'd pay to buy the stock outright. Let's say a stock is trading for $20 a share. So you'd have to pay $2,000 to buy 100 shares. But an option on the same stock with a $20 strike price would be much less expensive. While the price would depend on market conditions, it's entirely possibly you could buy it for just $50! Thanks to leverage, your potential gains are higher, too. Let's say the stock's price goes to $22 a share -- representing a 10% gain from its original price. Not too bad... but remember that an option's value is linked to its underlying stock's share price. With the stock at $22, the option will be worth a minimum of $200. That's a gain of 300% on your original investment. You've quadrupled your money -- from the same price move in the same stock... in the same amount of time! Of course, leverage can also work against you... but using options limits the damage.

Slash Your Risk 50?75%

Let's say that $20 stock falls to $18.

If you bought a call option on that stock with a $20 strike price for $50, its value would plummet as the stock fell.

In fact, it could lose all of its value. When it expired, the $50 you paid for the option would disappear as if it had never existed.

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On the other hand, the money you paid for the option is your maximum risk. Imagine how much more you would have lost if you bought the stock outright.

You paid $2,000 for the stock. It's now worth $1,800. You've lost $200!

Essentially, buying the stock option slashed your total cash at risk by 75%!

Now that you know a bit about options and the leverage they provide, let's quickly look at how you use this knowledge to trade seven-day weed contracts.

A Chance for Profits Every Seven Days

A seven-day weed contract is just an options contract associated with a public marijuana company.

Now, some stocks offer stock options that expire every single Friday of the year. You can usually only buy them a month or so before expiration -- meaning you're never in a position for more than 30 days.

But marijuana companies haven't been trading on the public stock exchanges for very long. And most marijuana stocks aren't traded enough to have a robust options market around them.

In other words, you can only buy options for a few pot stocks... and only ones that expire monthly.

Remember, though, that you can sell your options at any time for a profit or a loss.

So you can turn a monthlong options contract into a seven-day contract by planning to open and close your trade within a week.

First, you need to choose a publicly traded company that specializes in marijuana and offers stock options you can buy and sell on it.

The three top companies that fit the bill are Canopy Growth (CGC), Cronos (CRON) and Tilray (TLRY).

Let me tell you a bit about each of them...

Canopy Growth -- The First Mover

Canopy Growth was one of the pioneers of medical marijuana in Canada. It started its business when local Canadian governments starting easing restrictions on cannabis for medical use.

Moving so quickly made it one of the first companies licensed to legally sell medical marijuana in Canada.

It was also one of the first marijuana companies to be listed on the Canadian stock exchange.

As Canada moved toward full recreational legalization -- as did some U.S. states -- Canopy's management went to work securing market share.

Some of that was through brand development. It started its business under the name Tweed... a name it wanted associated with marijuana like we associate the name Marlboro with tobacco.

It even hired a celebrity spokesman, rapper and well-known pot aficionado Snoop Dogg.

Canopy also created brands to focus on the therapeutic market -- catering to folks who aren't necessarily turning to marijuana to get high. Instead, they buy cannabis products to help alleviate problems associated with medical conditions.

Having different lines of products that cater to different clientele is a smart move. It allows the company to capture markets where cannabis is 100% legal in all cases... as well as the places where it's still only available by prescription.

The other way Canopy has secured its position is by acquiring smaller rivals. It's bought out 13 companies since 2014, greatly expanding its reach.

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The acquisitions have helped build a network of retail locations to help sell its products. It's also given them farms to grow its products, not to mention labs to develop new strains of cannabis with desired characteristics.

Plus, it's developing clinical trials for drugs containing chemicals found in its weed.

It's even allowed Canopy to expand overseas, including making inroads in the United States.

The company made big headlines in 2018 when Constellation Brands took an interest in Canopy.

Constellation, which owns Corona beer, Svedka Vodka and other alcoholic beverage brands, bought a 10% stake in Canopy. Later that year, it upped its position to 38%, spending $4 billion for the privilege.

It's currently the largest marijuana pure play on Wall Street, worth over $8 billion.

For many investors, it's the first name that comes to mind when marijuana makes news. So it's one of the best ways to speculate on the cannabis market.

But there are two other names to keep an eye on.

Cronos -- A Smaller Canopy

While Canopy was the first pot stock to be listed on a Canadian exchange, Cronos Group was the first to list on a major U.S. exchange.

It joined the Nasdaq in February 2018.

Before then, marijuana companies in the United States traded over the counter -- meaning buying and selling shares was a lot harder. They also trade on the Canadian stock exchange, which is harder for Americans to invest in.

But like Canopy, the company is based in Canada. And like Canopy, the company was formed specifically to take advantage of Canada's loosened regulations.

The big difference is the approach it took. While Canopy started with a brand idea for Tweed and moved from there, Cronos started out as PharmaCan Capital. It was essentially a pool of money looking for promising marijuana investments.

So its growth was solely dependent on smart acquisitions. And that's exactly what it did.

Today its business is like a miniature version of Canopy. It's established distinct brands focusing on purely recreational use... premium brands that promise tokers a more sophisticated high... and brands that catering to medicinal users.

It grows its own products and researches new strains. It has also built a distribution network in countries where marijuana is currently legal.

The company has also signed with a major partner. Back in December, it received a $1.8 billion cash injection from Altria Group.

You might know Altria better by its former name, Philip Morris. That's right... the famous tobacco company has branched into marijuana.

It makes sense if you think about it. While legal marijuana is spreading across the world, tobacco products remain vilified. Moving into the pot business helps keep the company relevant as more and more people squash their traditional cigarette habits.

Having such a big name in its corner give Cronos a definitive sense of legitimacy -- much like Constellation's stake in Canopy helped convince Wall Street that the marijuana market was for real.

And really, the biggest difference between Canopy and Cronos is the fact that Cronos doesn't have dedicated retail locations of its own. Instead, it has to convince stores to sell its goods or sell them through its online portal.

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