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.
Further Explanation to: Trade Alert - (AAPL)
Sell the Apple (AAPL) June, 2013 $380-$410 Call spread at $29.50 or best
Closing Trade
6-21-2013
expiration date: 6-21-2013
Portfolio weighting: 10%
Number of Contracts = 4 contracts
This position expires in six hours. As long as Apple (AAPL) stock closes over $410, you will keep the maximum profit of $940, or 0.94% for the notional $100,000 model portfolio.
However, given the recent market volatility, and the surprise, last minute hit we took on gold (GLD) yesterday, I am going to wimp out here and take profits now. That means leaving $200 on the table, or 0.20%. Big deal. The risk/reward here overwhelmingly favors taking the profit now. If this position goes wrong from here, it could go wrong big.
That leaves us with an 80% cash position in these horrific trading conditions. The remaining two 10% positions are short yen (FXY), and long Japanese stocks (DXJ) in dollars. These are both making money now, have big safety cushions, and are great places to be.
The problem you will have executing this trade is that, with so little time left to expiration, these options have gone illiquid. No one wants to be left holding the bag at 4:00 PM EDT. The spreads have widened. So I have taken the middle market levels off the screens. I may be worth placing an order at a five cent discount to the middle market just to get it done.
Here are the specific trades you need to execute this position:
Sell 4 June, 2013 (AAPL) $380 calls at??????.??$34.65
Buy to cover Short 4 June, 2013 (AAPL) $410 calls at.??.$5.15
Net Proceeds:??????????....????.?..?....$29.50
Profit: $29.50 - $27.65 = $1.85
($1.85 X 100 X 4) = $740 ? 0.74% for the notional $100,000 model portfolio.
