Trade Alert - (HD) September 21, 2015

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I am not inclined to take small, insignificant profits this fast. You may not be able to cover your commission cost on a profit this small, depending on where you got in.

So, call this one a push. 67 basis points in these conditions is better than a poke in the eye with a sharp stick.

However, the global financial markets are still highly focuses on risk control, and volatility is anything but a distant memory.

The technical reports I received this weekend were nothing less than diabolical, and a test of the August lows appears to be in the cards.

You never want to get too aggressive before October, a month when market crashes are as common as leaves changing colors.

This has nothing to do with Home Depot (HD), which is still one of the best companies to invest in presently.

It revolves more around the main market, which after the Fed?s non-decision last week, is starting to smell a little odiferous.

I?ll go back into (HD) shortly. But I want enter when the other traders are throwing up on their shoes. In conditions like these, take the luxury of being choosy.

Keep in mind that we have ?fast trading? conditions now, so the prices can be anywhere.

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. Here are the specific trades you need to execute this position:

Sell 23 October, 2015 (HD) $105 calls at????.??$11.80
Buy to cover short 23 October, 2015 (HD) $110 calls at?..?$7.13
Net Proceeds:??????????????????.....$4.67
Profit: $4.67 - $4.40 = $0.27

(23 X 100 X $0.27) = $621 or 0.62% profit for the notional $100,000 portfolio.?

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