Last week, I explained how my Mayhem Trader subscribers earned a 500% return in less than a month. In that case, I recommended a put option on 3M Company (NYSE: MMM). A put option increases in value when the price of the underlying security goes down.

The point of that article is that there is plenty of money to be made while the stock market is bouncing all over the place. In fact, I would argue that there is MORE money to be made during periods of extreme volatility then there is when the market is on cruise control.

The beauty of this type of stock market is that you can make money both ways. At the same time I was making a killing while 3M was dropping, I was also scoring a big win while another stock was surging.

Today, I’ll explain how my PF Pro subscribers doubled their money in just six weeks. On July 19, I recommended a call option on agricultural commodities producer Archer-Daniels-Midland (NYSE: ADM). A call option increases in value when the price of the underlying security goes up.

A few days earlier, the Consumer Price Index (CPI) report for June made clear that food prices were still going up. As noted in the report: “The food index increased 10.4 percent for the 12-months ending June, the largest 12-month increase since the period ending February 1981.”

That sobering statistic sent ADM tumbling to its lowest share price since February. At that week’s closing share price of $72, ADM was down 26% from its all-time high above $98 achieved just three months earlier.

Billion Dollar Guidance

To be sure, the company’s operating results were being adversely impacted by global supply chain disruptions that continue to vex delivery schedules. But according to my PF Pro stock screener, Wall Street was overestimating the impact of those factors on ADM’s financial performance.

When inflation eventually slows down, the company’s operating margins should expand proportionately. And there was good reason to believe that the supply chain is loosening up as evinced by the recent drop in the Global Supply Chain Pressure Index.

I didn’t know if the company would revise its guidance upward when it released its Q2 results the following week, but I believed it would become apparent over the second half of this year that its results will be better than Wall Street was expecting.

Turns out, I didn’t have to wait long to get my answer. On July 26, Archer-Daniels-Midland released its fiscal 2022 Q2 results that came in better than expected. In addition, the company’s guidance for the remainder of this year is exactly what I was expecting:

“Looking forward, we expect the combination of our strategic actions and continued good demand for our products to propel very strong earnings in the second half of 2022, with strong cash flows enabling us to accelerate approximately $1 billion in share repurchases into the back half of the year.”

It didn’t take long for the lemmings on Wall Street to get behind ADM. Over the next six weeks, the stock steadily rose until crested above $90 on August 25.

As a result, the put option that we bought in July for $10 was trading above $20. I sent out an alert to my subscribers, several of whom told me that they booked profits in excess of 100%.

Crunch Time Coming

I have to admit that I didn’t expect either of those trades to pay off quite so fast. On the other hand, in this type of stock market anything can happen.

I don’t expect that to change anytime soon. The next six months will be “crunch time” for the stock market.

After the midterm elections in early November, the next six weeks will be filled with constant speculation regarding the holiday gift buying season. And in January, most companies will begin reporting their Q4 and full-year results along with guidance for 2023.

As a short-term trader, that is music to my ears. Each day’s news will send some stocks careening down the charts while lifting others. Some folks might view that as chaos but to me it makes perfect sense.

Forgot about valuing growth stocks based on expected profits several years into the future. Now, the name of the game is maintaining profit margins without losing market share.

There are other ways to profit from stock market volatility. Consider our premium trading service, Rapier’s Income Accelerator, helmed by our income expert Robert Rapier.

Robert Rapier can show you how to squeeze up to 18x more income out of dividend stocks, with just a few minutes of “work” each week. His methods leverage market volatility for steady income, trade after trade. Click here for details.