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 - (AA) ?TAKE PROFITS
Sell the Alcoa (AA) February, 2015 $17-$18 in-the-money vertical bear put spread at $0.90 or best
Closing Trade
2-4-2015
expiration date: February 20, 2015
Portfolio weighting: 10%
Number of Contracts = 123 contracts
You can sell this put spread anywhere within $0.85 - $0.92 range and get out close to even.
If you sold short the shares outright cover the short shares.
With oil?s 15% three-day rally, there is a risk that the commodity meltdown has finally bottomed. What makes the move convincing is that every single commodity, including energy, copper, the base metals, and even the ags, all moved in unison.
This all means you get out of shorts in the aluminum space.
The lesson of trading this year is to stop out of positions quickly, once they lose the momentum that had been working in you favor.
This position did its job, even though we didn?t make money, because it gave us downside protection against the hefty longs we were running in January.
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 123 February, 2015 (AA) $18 puts at?????$1.60
Buy to cover short 123 February, 2015 (AA) $17 puts at..??.$.70
Net Cost:??????????????????.....$0.90
Profit: $0.90 - $0.88 - $0.85 = $0.02
(123 X 100 X $0.02) = $246 or 0.25% profit for the notional $100,000 portfolio.
