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 - (BABA) ? STOP LOSS
Sell the Alibaba (BABA) December, 2014 $100-$105 in-the-money vertical call spread at $3.30 or best
Closing Trade
11-19-2014
expiration date: December 19, 2014
Portfolio weighting: 10%
Number of Contracts = 25 contracts
You can sell this vertical call spread anywhere within $3.30-$3.60 range and limit your losses.
If you purchased the stock sell for the short term ? hold for the long term.
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 10% 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 25 December, 2014 (BABA) $100 calls at???.............??$10.30
Buy to cover short 25 December, 2014 (BABA) $105 calls at...$7.00
Net Cost:??????????????................................????.....$3.30
Potential Loss: $4.25 - $3.30 = -$0.95
(25 X 100 X $-0.95) = -$2,375 or -2.38% loss for the notional $100,000 portfolio.
