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 - (DIS) SELL - STOP LOSS
SELL the Walt Disney Co. (DIS) January, 2016 $100-$105 in-the-money vertical bull call debit spread at
$3.70 or best
Closing Trade
12-21-2015
expiration date: January 15, 2016
Portfolio weighting: 10%
Number of Contracts = 23 contracts
This is a classic case of the fundamentals coming through exactly as I expected, but the stock failing to perform.
As I expected, Star Wars broke all records, bringing in opening weekend revenues of over $500 million.
I hate it when that happens.
The problem here is not with Walt Disney Co., but with the market as a whole.
Too many investors are expecting a scary Q1 for 2016 and aren?t going to wait for any Santa Claus rally to bail them out.
I also don?t need to be told twice that (DIS) broke its 200-day moving average on Friday. All of a sudden, going into the yearend with 100% cash looks like a great idea. Even a 10% position is too much.
If you own the stock outright, I would keep it. I expect (DIS) to continue to do well in 2016, but with a lot of volatility.
I think I?ll go watch Star Wars one more time, even though I already sent my Wookie suit to the dry cleaners.
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Optionshouse.
If you are uncertain on how to execute an options spread, please watch my training video on ?How to Execute a Bull Call Spread? by clicking here at https://www.madhedgefundtrader.com/ltt-executetradealerts/ ?
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:
SELL 23 January, 2016 (DIS) $100 calls at????.???...$8.00
Buy to cover short 23 January, 2016 (DIS) $105 calls at?..$4.30
Net Proceeds:???????????????.???????......$3.70
Loss: $4.25 - $3.70 = $0.55
(23 X 100 X $0.55) = $1,265 or 1.27% profit for the notional $100,000 portfolio.
