When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.
Trade Alert - (C) - BUY
BUY the Citigroup (C) October 2019 $69-$72 in-the-money vertical BEAR PUT spread at $2.60 or best
Opening Trade
10-3-2019
expiration date: October 18, 2019
Portfolio weighting: 10%
Number of Contracts = 38 contracts
I believe the double top is in for the (S&P 500 (SPY), at least for the next few weeks. The August ISM clearly took the air out of the market and it is going to take something spectacular from the China trade negotiations to pump it back up. The ramp up to impeachment is also eroding some confidence and distracting him from talking the market up.
Citigroup is one of the weaker major banks. With interest rates taking another run at new all-time lows, banks should perform poorly.
I am therefore buying the Citigroup (C) October 2019 $69-$72 in-the-money vertical BEAR PUT spread at $2.60 or best.
Don’t pay more than $2.75 or you’ll be chasing.
This is a bet that the Citigroup (C) will not trade above $69.00 by the October 18 option expiration day in 11 trading days.
If you don’t do options, stand aside. This is a very short-term options play only.
Here are the specific trades you need to execute this position:
Buy 38 October 2019 (C) $72 puts at………….………$6.70
Sell short 38 October 2019 (C) $69 puts at………….$4.10
Net Cost:………………………….………..………..….….....$2.60
Potential Profit: $3.00 - $2.60 = $0.40
(38 X 100 X $0.40) = $1,520 or 15.38% in 11 trading days.
To see how to enter this trade in your online platform, please look at the order ticket above, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video on How to Execute Vertical Call and Put Debit Spreads by clicking here.
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Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
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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 close to expiration.
If you don't get done, don't worry. There are another 250 Trade Alerts coming at you over the coming 12 months.