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 - (DXJ)
Sell the Wisdom Tree Japan Hedged Equity (DXJ) July, 2013 $37-$40 call spread at $2.70 or best
Closing Trade
6-21-2013
Expiration date: July 19, 2013
Portfolio weighting: 10%
Number of contracts = 40 contracts
I?m not liking the way the markets are trading this morning, so I will flee to the sidelines with a small profit. We may get a better entry point in a few days. If there has been a lesson this week, it is ?TAKE THE MONEY AND RUN?.
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.
Keep in mind that these are ballpark prices only. Spread pricing can be very volatile on expiration months farther out.
Here are the specific trades you need to execute this position:
Sell 40 July, 2013 (DXJ) $37 calls at?????????$7.90
Buy to cover short 40 July, 2013 (DXJ) $40 calls at..??.$5.20
Net Cost:????????????????..??.....$2.70
Profit: $2.70 - $2.60 = $0.10
(40 X 100 X $0.10) = $400 or 0.40% profit for the notional $100,000 portfolio.
