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.
Trade Alert - (SPY)- TAKE PROFITS
SELL the S&P 500 SPDR?s (SPY) March, 2016 $204-$207 in-the-money vertical bear put spread at $2.90 or best
Closing Trade
3-10-2016
expiration date: March 18, 2016
Portfolio weighting: 10%
Number of Contracts = 37 contracts
After the fireworks in Europe this morning, with the new European Central Bank dose of quantitative easing, I am going to take advantage of a stock market that has suddenly gone my way.
So I am taking profits in my position in the S&P 500 SPDR?s (SPY) March, 2016 $204-$207 in-the-money vertical bear put spread.
The position expires in only six trading days, and it is not worth the risk to hang on for only ten more cents.
A 6.22% profit in only five trading days in these dreadful trading conditions looks like a win to me.
If you bought the ProShares Short S&P 500 Short Fund ETF (SH), or the ProShares Ultra Short S&P 500 Short Fund 2X ETF (SDS), keep them. I think we are headed lower, but over a longer period of time.
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of optionshouse.
If you are uncertain on how to execute an options spread, please watch my training video on ?How to Execute a Vertical Bear Put Debit Spread? by clicking here at https://www.madhedgefundtrader.com/ltt-executetradealerts/. You must me logged into your account to view the video.
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 37 March, 2016 (SPY) $207 puts at????.?.??$10.30
Buy to cover short 37 March, 2016 (SPY) $204 puts at.?..$7.40
Net Proceeds:???????????????????......$2.90
Profit: $2.90 - $2.73 = $0.17
(37 X 100 X $0.17) = $629 or 6.22% in five trading days
?
