Have you ever heard of something called the Texas Hedge?

It’s a term that will probably be unfamiliar to most beginner, or more casual traders.

In a nutshell, the Texas Hedge is a high-risk—and speculative—trading strategy where a trader doubles down on a position instead of hedging against risk. They often do this by adding more of the same asset to a portfolio.

You’re pretty much betting that prices will continue to move in the same direction.

In the context of options, a trader would be taking a position, going on the same side of the market using both calls and puts. In scenarios like these, you could either be bullish or bearish.

Earlier this week, we discussed the results from Scott Bauer’s trade example Scott discussed on the Schwab Network for SanDisk (SNDK). In that same segment, Scott outlined another trade example for JPMorgan Chase & Co. (JPM).

Scott followed the Texas Hedge strategy in his JPM trade example, as the stock steadily climbed this week.

When He closed his position in JPM—it showed an 86%* result!

Scott recorded a video breaking down his trade example, and how it led to this impressive result. Scott’s analysis explains the Texas Hedge strategy, how he applied it in this trade example, and some of the technicals that helped this position show a winning result.