Yeah, some trades are obvious, like Yancoal at $5 and WHC at $5.50 and SMR at $2.50. Margin leverage is good for this, and then deleverage back towards zero debt as the reversion to mean occurs. Picking the top is a bit harder, but sometimes this is obvious (WHC above $8.50 earlier in the year) and writing covered call options is a relatively risk free way to profit. Both methods have tax implications, but, if you're always hodling by using these methods, there's less chance of missing upside re-rates. Greatest risk is missing upside if the covered call is placed wrong, or getting margin called if your valuation is over valuing when buying on margin. As always, there's the aggressive level of leverage to be chosen which limits loss/profit.
WHC Price at posting:
$6.58 Sentiment: Buy Disclosure: Held
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