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.
Trade Alert - (SPY)
Sell the S&P 500 (SPY) August, 2014 $200-$202.50 bear put spread at $2.49 or best
(in additional to selling the S&P 500 (SPY) August, 2014 $202.50 - $205 bear put spread)
Closing Trade
8-6-2014
expiration date: August 15, 2014
Portfolio weighting: 10%
Number of Contracts= 51 contracts
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. It is clear that these desperate policies are already working.
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.
Here are the specific trades you need to execute this position on your profit and loss statement:
Sell 51 X August, 2014 (SPY) $202.50 puts at???????$11.05
Buy to cover short 51 X August, 2014 (SPY) $200.00 puts a?$8.56
Net Cost:???????????????????.....$2.49
Profit: $2.49 - $1.95 = $0.54
Potential Profit = (51 X 100 X $0.54) = $2,754, or 2.75% for the notional $100,000 portfolio.
