When I started Total Wealth, I promised you a blend of analysis, tips, and specific trading tactics to play today's financial markets for big profits.
Today, I want to keep that promise with an easy-to-understand and even easier-to-implement trade idea related to the FCC's recent repeal of net neutrality.
There are a variety of ways to trade what's happened, but I've got something special lined up – a trade that has the potential to turn a profit no matter whether the markets go up, down, or simply sideways.
Here's what you need to know.
Big Profit Potential in a Tiny Trade
Depending on your perspective, the end of net neutrality is either the greatest thing since canned beer or like having legendary movie bad guy Darth Vader use the "force" against you.
I'm not going to wade into that – my job is to help you make money.
Right now, the best way to do that is via a "pairs trade."
The setup is straightforward.
The end of net neutrality means that corporate players – thinking carriers here – have every incentive in the book to "throttle" content and to carve up the Internet based on a "who wants to pay how much for what degree of service" model.
At the same time, the end of net neutrality means that content delivery companies like Netflix Inc (NASDAQ:NFLX), Amazon.com Inc (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), and others will have their content buffered by companies that they can't control. It also means that smaller service providers like Frontier Communications Corp (NASDAQ:FTR), who often absorb excess network capacity as a means of playing around the edges, will get clobbered as margins thin out and user growth flatlines.
You and me, of course, are caught in the middle. High-speed delivery and reliability are going to go right out the proverbial window.
In fact, I'm already experiencing that and you may be, too. My network latency, for example, has doubled even though I use a very high-speed, custom fiber connection here in the office. At the same time, T-Mobile US Inc (NASDAQ:TMUS), which I use for our cell phones, has a Binge On "feature" that's supposedly for "optimization" but which really is a content restrictor by any other name. And, not surprisingly, my Comcast (NASDAQ:CMCSA) TV package – a high-value delivery with both English and Japanese content – went on the fritz.
All three companies claim that nothing of the sort is going on but, if that's the case, why can I pay extra "not" to be subjected to throttling and why do I suddenly have to spend five hours waiting for a technician to grace me with his or her presence and try to upsell me another "package?"
I was born in the middle of the night, but it was not last night. The whole thing makes me madder than a hornet – but that's a story for another time.
How You Can Profit…
Let's shift our attention to how to play the situation profitably.