Everyone already knows marijuana stocks are some of the best long-term investments on the market, but we want to share how to make short-term profits in the $10 billion marijuana industry: options trading.
You probably haven’t heard much about trading marijuana stock options. That’s because most marijuana stocks are traded on over-the-counter markets, so you can’t purchase calls or puts on them.
But we’ve found a way around that…
There’s a strategic “backdoor investing” opportunity developing right this minute by buying calls on Microsoft Corp. (Nasdaq: MSFT).
I know what you’re thinking: Microsoft is a tech giant. Over 400 million devices run Windows 10, and Microsoft Office has been downloaded 340 million times on iPhones, iPads, and Android devices.
But Microsoft’s advanced cloud technology makes it one of the “safest” plays in the cannabis industry.
In June 2016, cannabis compliance firm KIND Financial partnered with Microsoft to run its software through Microsoft’s cloud.
KIND uses technology to track marijuana plants from “seed to sales.” Cannabis growers will register each plant they grow with the state government, as well as the sale of each marijuana bud from the plant.
This ensures dispensaries are compliant with local and state laws, a service essential to the growing legal marijuana industry.
It’s a matter of “when,” not “if,” the United States completely legalizes medical marijuana, as 30 states and the District of Columbia have some form of legal marijuana laws.
There isn’t information on Microsoft’s revenue from KIND, but the tech giant expects to generate $20 billion in commercial cloud revenue in 2018.
Best of all, Microsoft has diversified revenue sources through software products, like Microsoft Word, and hardware products, like its PCs, tablets, and gaming consoles. That helps keep the stock price stabilized during downturns for pure cannabis stocks.
Now, we all know there’s been volatile price swings in the market lately. The Dow Jones Industrial Average dropped 4.48%, from 25,004.89 on March 9 to 23,833.08 on March 28.
And Microsoft stock hasn’t been immune…
The MSFT stock price performed worse than the Dow, dropping 5.73% during that same time.
But stocks are never going straight up, just like this snarky tweet points out.
But savvy traders know volatility is just another way to make money.
And we’ve uncovered a way to turn Microsoft’s recent slump into your next win.
In fact, there could be a 102% profit opportunity just sitting there for the taking…
By: Jack Delaney, Money Morning