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 ? (AAPL)
Sell the (AAPL) January, 2013 $525-$575 Call Spread at $9.50 or best
Closing Trade
1-10-2012
expiration date: 1-18-2013
Portfolio weighting: 10%
($10,000/100/$5.79) = 3 Contracts
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 buy the legs individually or you will end up losing much of your profit up front.
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 profitable position:
Sell 3 X (AAPL) January, 2013 $525 Calls at?????????. $10.00
Buy to cover short 3 X (AAPL) January, 2013 $575 calls at???. $0.50
Net Proceeds????????????????.??.???. $9.50
Loss = $37.50 - $9.50 = $28.00
(-$28.00 X 100 X 3) = -$8,400, or -8.4% for the notional $100,000 model portfolio.
