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.
Trade Alert - (FXE)
Sell the Currency Shares Euro Trust (FXE) February, 2015 $120-$122 in-the-money bear put spread at $1.97 or best
Closing Trade
1-8-2015
expiration date: February 20, 2015
Portfolio weighting: 10%
Number of Contracts = 63 contracts
As much as I hate to make money off of someone else?s blood, there is no doubt that the terrorist attack in Paris yesterday gave us some extra juice in our short in the Euro. This will be temporary.
There is nothing better than selling short a security and then watching it go into free fall.
At this point we have captured 93% of the potential profit in this trade, so the risk/reward is no longer attractive. There is not point carrying on for another 5 weeks just for a few more basis points.
We have earned a gob smacking 23% on this position is a mere three trading days. Let?s hope we can keep up this pace all year.
Also, in the off chance that we get a black swan out of the blue and a two cent rally in the Euro, I want to have some dry powder with which to resell it.
You can see this put spread anywhere within $1.90-$2.00 range and lock in an outstanding short term profit.
If you own the ProShares Ultra Short Euro ETF (EUO), take profits for the short term, but keep it for the long term. The long march towards parity for the greenback with the Euro continues.
Keep in mind that the options market is highly illiquid now, so don?t hold me to these prices. They are ballpark estimates, at best.
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.
If the price of this spread has moved more than 5% by the time you receive this Trade Alert, don?t chase it. Wait for the next one. There are plenty of fish in the sea.
Here are the specific trades you need to execute this position:
Sell 63 February, 2015 (FXE) $122 puts at?????$6.00
Buy to cover short 63 February, 2015 (FXE) $120 puts at..??.$4.03
Net Cost:??????????????????.....$1.97
Profit: $1.97 - $1.60 = $0.37
(63 X 100 X $0.37) = $2,331 or 2.33% profit for the notional $100,000 portfolio.
