Chris’ note: If you’ve been following the Dispatch, you know master trader Jeff Clark – the man who made so much money trading options that he retired 25 years early – is recommending stocks for the first time in his career.

And one look at his results shows you why… His system has already spotlighted at least one stock that shot up 600% in less than two months. And tonight, at 8 p.m. ET, he’s giving away his top three trade setups… including the names and tickers of the stocks.

So don’t miss your chance to cash in on Jeff’s newest and most unique investing strategy. You can still sign up for free right here. I’ll be tuning in, and I urge you to as well.

And to help prepare for tonight’s big event, I called up Jeff to get more details on his system. Here’s what he told me…

Chris Reilly, managing editor, Casey Daily Dispatch: Jeff, for 36 years you’ve made a fortune trading options. And you’ve helped all kinds of people retire rich using options. But recently, you told me you’ve been targeting small stocks. So, why the change now?

Jeff Clark, editor, Delta Report: Well, Chris, I’m still going to be trading options. Honestly, there’s no better way to maximize your reward potential and minimize your risk than using options. So that’s always going to be what I do. I’ve made a career out of it, and I can’t possibly ever see changing that.

But I’ve got to tell you… Around two years ago, I was looking at one of those financial news networks and watching the tickers go across, and I noticed this tiny stock that was trading for three bucks. It was up two bucks on the day. And I thought, “Geez, that’s a 200% return in a day. That’s an option-like return on a stock.”

I didn’t pay much attention to it other than to note that it was somewhat interesting. Then next day, the same thing… I looked up at the ticker and noticed another tiny stock that was trading with a 100%-plus gain.

That got my attention. I started thinking, “Gosh, if you can find these little $2, $3, $4, $5 stocks that have the potential to provide option-like returns, why not? Maybe there’s a way we can do something with that and enhance our trading.”

So, while I’m still looking at trading options and I will always trade options on the bigger guys, meaning the stock’s 10 bucks a share or more… I realized that on the smaller-type stocks, you don’t need to trade options. They’re already at option pricing levels, and you can still find situations where they can achieve option-like returns where you can make 100% or 200% overnight if you have the right conditions.

I spent the last year-and-a-half trying to find out if there was something similar among all of these stocks that were just popping like popcorn. It turns out there are some similarities in the way that they trade prior to when they shoot higher. And so I spent the last year-and-a-half trading these things with my own money and doing quite well. I thought, “Well, this is something I ought to share with readers.”

Chris: But what tells you that these small stocks won’t just keep falling further? How do you try and avoid “catching a falling knife”?

Jeff: That’s a great question, because what we’re not doing is catching falling knives. If you look at a stock chart, a falling knife is just one of these stocks that rolls off a cliff and falls straight down. We’re not trying to catch the absolute bottom.

What we’re looking for is a specific series of events that occurs prior to these stocks taking off. And after a stock has fallen, it usually takes a couple months for it to consolidate that decline, chop back and forth, and provide the specific setup that I’m looking for.

I’m basically going into the building after it’s collapsed… going through the rubble… and finding the valuables that are sitting there.

Chris: Got it. Does this strategy work in the current market environment?

Jeff: I’ve been using this strategy for about 18 months. During that time, the stock market’s basically gone nowhere. We’ve had this slight up move, but if you look back 18 months from where we are today, the S&P has not moved much higher.

I don’t think it matters whether the broad market is moving up or down because these stocks, since they’re lower-priced, are not widely followed. They’re not followed by institutional money managers who are trying to trade the index or trying to keep up with the market, that sort of stuff.

These are stocks that have their own little things going for them – or maybe their own things going against them, which is what caused the price decline in the first place. I really don’t care what the stocks do or what the companies do. All I’m looking for is a specific chart pattern. I think that’s a big distinction, because if you’re looking at investing, where you want to buy and hold a stock for years, you have to know what the company does.

With this strategy, I go strictly off the chart patterns. And I know I’m going to either be right or wrong within three months. I’m going to know whether this trade works. And I’m typically out of the trade within about three months… less than that in some cases.

Chris: Do you have a specific example of this working out for you?

Jeff: One example is Sears Holdings. Who in their right mind buys Sears Holdings, right? It’s a bankrupt company. However, I bought that stock earlier this year, and doubled my money off of it.

So you can be a little less discriminating on what the underlying stock is because you’re not looking for an investment… You’re looking for a trade. You want to be out of it within a relatively short period of time. It opens up the possibility to trade a lot of these low-priced stocks again and again.

All I’m looking for is that point where the market has already discounted the maximum disappointment possible. Then I’m just buying those, and then one little piece of good news can send them higher.

Chris: I’m certainly intrigued by all this, and I don’t want to take up too much of your time… but you’ll be explaining this in more detail tonight, right?

Jeff: That’s right. Tonight at 8 p.m. ET, I’ll go more into this strategy, including some examples of the trades that I’ve made. I’m also going to reveal three stocks that I think are primed to move higher right now.

Chris: That sounds great. I’ll be tuning in for sure. Thank you for your time, Jeff.

Jeff: My pleasure, Chris.

Chris’ note: I’ve known Jeff for a few years now, and I’ve learned he never puts his own money into a strategy unless he’s confident it will work. That’s why I can’t wait to see what he’s come up with tonight at his presentation. If you don’t want to miss out either, make sure you sign up right here to save your spot.