Hey guys, I got a few requests for a blog on how to play one dollar rolls. The one dollar roll play is one of the most powerful plays in small cap land. Almost every one dollar roll play turns into a 10%+ winner. This play is extremely effective this time of year (january) because of tax loss selling, which Kunal has talked about alot lately. Stocks have been beaten down for months and are now ready for big bounces. Alot of these plays that people are taking big losses on are under a buck and begin to head back towards that one dollar level. Once the stock crosses one dollar, it is game for a one dollar roll play. You simply by the stock as it crosses though the one dollar level. The stock then typically spikes hard immediatly 10-20 cents. We have seen alot of examples of this past few week.. $motr, $ivan we caught for 10%+ percent gains simply by playing this setup. Today there were two major one dollar roll moves that I am going to highlight, they are KUTV and CAK
KUTV- the stock had been beaten down for weeks all the way to the .75 cent level. Stock was 3.68 just 4 months ago. this is the perfect tax loss selling play. today the company released a PR (which they typically do when the stocks get this cheap). Tax loss selling play coupled with a PR makes this a extremely high probability bounce back play. So let’s say you miss the intial PR entry..well you notice that the stock is approaching the 1 dollar level and immediatly start thinking about the 1 dollar roll play. The stock hit 1 dollar and went nuts.. spiking as high as 1.25. One dollar rolls are quick plays, scalps.. You exit into the spike and take your 10-20% gain in 2 minutes. Both the intraday and daily charts are posted below. the daily alerts you to watch it and the intraday is for timing your entry
CAK- same idea as KUTV just without the PR. Stock beaten down for last 2 weeks.. starts popping up on volume and heading toward the one dollar level. Kunal bought the stock in the room at 1.00 and sold at 1.15.. thats a 15% gain in minutes. Easiest play around with huge return rate.