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.
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Trade Alert - (FXY)
Buy the Currency Shares Japanese Yen Trust (FXY) April, 2016 $87-$90 in-the-money vertical bear put spread at $2.57 or best
Opening Trade
3/15/16
expiration date: April 15, 2016
Portfolio weighting: 10%
Number of Contracts: = 39 contracts
The Bank of Japan meeting came and went last night, with no decisive move on quantitative easing or interest rates one way or the other. We have to wait another month for the central bank to move.
Our existing Currency Shares Japanese Yen Trust (FXY) March, 2016 $89-$92 in-the-money vertical bear put spread expires in only three trading days at its maximum profit point.
I am therefore going to double up and add the Currency Shares Japanese Yen Trust (FXY) April, 2016 $87-$90 in-the-money vertical bear put spread. It is a bet that the (FXY) will not trade above $87 by the April 15 expiration in 23 trading days.
The (FXY) is currently trading at $85.60.
If for any reasons you can?t do the options, just buy the ProShares Ultra Short Yen ETF (YCS) outright. This is the best entry point in a year.
I think we are at the tag ends of the recent unbelievable bout of yen strength.
Triggered by the Bank of Japan?s shocking move to negative interest rates (NIRP), it has been driven my a massive unwind of hedge fund positions in everything around the world that were all financed by short yen positions.
The memo is out now, and the bulk of the ?hot money? positions are gone. After some fits and starts, I expect the yen to resume its long-term structural downtrend shortly.
You can execute this spread anywhere in the $2.57-$2.70 range and have a good shot at making money in the 15 trading days to expiration.
The best execution for the options 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.
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 trade, 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 be logged into your account to view the video.
Don?t execute the legs individually or you will end up losing much of your profit.
Keep in mind that these are ballpark prices only.
Spread pricing can be very volatile, and the liquidity in the options market isn?t that great these days. If you can?t get done at the $2.60 price, then keep raising you bid in 5 cent increments until you succeed. If that doesn?t work, then just walk away.
More depth on the Japanese yen to follow.
Here are the specific trades you need to execute this position:
Buy 39 April, 2016 (FXY) $90 puts at?????$4.60
Sell short 39 April, 2016 (FXY) $87 puts at..??.$2.03
Net Cost:??????????????????.....$2.57
Potential Profit at expiration: $3.00 - $2.57 = $0.43
(39 X 100 X $0.43 ) = $1,677 or 16.73% profit on the position in 23 trading days.
