Here’s how to quadruple your money with GoPro: Trader

GoPro shares have cratered over the past year, losing 60 percent of the value. But even as the stock slides on Tuesday, one trader thinks the company is set to rally into the holiday season.

Not only did GoPro just release the Hero 5 series of cameras, but "they're also making a strong move into virtual reality, so I like this stock. I like where this is headed in the longer term," Todd Gordon of said on CNBC's "Trading Nation."

On the weekly chart, Gordon espies an "inverse head and shoulders" pattern. This is a bullish pattern that is supposed to support a rally should a stock break above a given "neckline" level.

"If we can get a continued push, we should be able to move up towards higher levels as we move into the holiday season."

Gordon thinks the stock, currently trading just above $14, will rise to $20 in the months ahead.

In order to play for such a move, Gordon is buying a call spread. Specifically, he purchased the December 15-strike calls and sold the 20-strike calls for a total of $1.40 per share, or $140 per options contract.

If GoPro shares are actually at or above $20 upon December expiration, the call spread will be worth $500 — meaning that Gordon will have nearly quadrupled his money.


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Trader Bios


Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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