As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. This is your chance to ?look over? John Thomas? shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen.
Trade Alert - (IWM)- STOP LOSS
Sell the Russell 2000 iShares (IWM) February, 2015 $113-$118 deep in-the-money vertical bull call spread at $2.06 or best
Closing Trade
1-6-2015
expiration date: February 20, 2015
Portfolio weighting: 10%,
Number of Contracts = 25 contracts
I?m going to teach you a new trick here.
I?m going to show you how to manage your risk in a situation like we have now, where the trade immediately goes bad and has six more weeks to expiration.
This involves rolling down the strikes on your existing position in the Russell 2000 iShares (IWM) February, 2015 $113-$118 deep in-the-money vertical call spread to the Russell 2000 iShares (IWM) February, 2015 $107-$112 deep in-the-money vertical call spread.
This way you can covert a large loss into a small loss and live to fight another day.
You can cut your losses here by stopping out and SELL the Russell 2000 iShares (IWM) February, 2015 $113-$118 deep in-the-money vertical call spread anywhere within a $2.00-$2.10 range and limit your losses.
I will then follow this up with a second trade alert to BUY the Russell 2000 iShares (IWM) February, 2015 $107-$112 deep in-the-money vertical call spread. This way, you can use the current sky-high volatility to make back most of your money on the February $113-$118 position.
The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep in-the-money spread trades can be enormous.
Don?t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.
If the price of this spread has moved more than 5% by the time you receive this Trade Alert, don?t chase it. Wait for the next one. There are plenty of fish in the sea.
Here are the specific trades you need to execute this position:
Sell 25 February, 2015 (IWM) $113 calls at?????$4.73
Buy to cover short 25 February, 2015 (IWM) $118 calls at...$2.67
Net Cost:??????????????????.....$2.06
Loss: $3.97 - $2.06 = $1.91
(25 X 100 X -$1.91) = -$4,775 or -4.76% profit for the notional $100,000 portfolio.
