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. This is your chance to ?look over? John Thomas? shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen.
Further Update to: Trade Alert -(TLT)
Buy the iShares Barclay 20+ Year Treasury Bond Fund (TLT) July, 2014 $116-$119 in-the-money bear put spread at $2.25 or best
Opening Trade
5-19-2014
expiration date: July 18, 2014
Portfolio weighting: 10%
Number of Contracts = 45 contracts
Just a few quick words here.
I think we chewed through a good chunk of our short squeeze with the plunge in yields from 2.60% to 2.48%. Even if the bond market continues to grind up, it is going to be a low volume slog. These strikes give you a break even in the position of 2.38% in yield terms, the old all time low.
We only need one bad day in the bond market to make the bulk of your profit in this trade. If you can?t do options, then buy the (TBT) for a couple of points in the short term, and a double for the long term.
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:
Buy 45 July, 2014 (TLT) $119 puts at?????$6.75
Sell short 45 July, 2014 (TLT) $116 puts at..??.$4.50
Net Cost:??????????????????.....$2.25
Potential Profit: $3.00 - $2.25 = $0.75
(45 X 100 X $0.75) = $3,375 or 3.38% profit for the notional $100,000 portfolio.
