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 - (FXA)
Sell the Currency Shares Australian Dollar Trust (FXA) December, 2013 $89-$91 bull call spread at $1.95 or best
Closing Trade
11-19-2013
expiration date: 12-20-2013
Portfolio weighting: 10%
Number of Contracts = 56 contracts.
This is our 13th consecutive closing profitable position, and 19th consecutive profitable Trade Alert when you include our remaining open positions. I have only seven more winners to go before I break my old record of 25.
Since I strapped on this trade last week, the (FXA) has popped a full 1 ? points to the upside. It?s tough to say where these options are really trading, they are so illiquid and the spreads so wide. If you didn?t do the trade at all, just consider this part of your educational effort.
However, the Currency Shares Australian Dollar Trust December, 2013 $89-$91 bull call spread was marked at their maximum possible value of $2.00 by the market makers at last night?s close. So I am going to take the hint and close the position. At this price we have harvested 75% of the potential profit, and we still have a full month to run before the December 20 expiration.
Yes, I should have been more aggressive, moving the strikes closer to the money, farther out in expiration, and bigger in size. But it?s always easy to say that about your winners.
To close the position just put in a limit order for the entire spread at $1.95 and wait for the market to come to you, even if it is for a few days. It is impressive how much they are crushing volatility in the options markets in the run up to the Thanksgiving holidays, so you should eventually get done.
Then you can plow the money back into other trades, such as buying global stocks and commodities, and shorting bonds and the yen. You can also buy back the Aussie on the next two-point dip.
I still believe that we are in bull mode for the Aussie longer term, and that we should make it above par, or $1.00, next year. The recent reforms announced by China last week certainly remove any doubt about the northward direction.
It all provides fresh rocket fuel for the global synchronized recovery in 2014, which I have been predicting since the summer. A parallel pop in Australian stocks (EWA) confirms this view. So if you aren?t in the options and own the (FXA) outright, I?d hang in there
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.
Keep in mind that these are ballpark prices only. Spread pricing can be very volatile on expiration months further out.
Here are the specific trades you need to execute this position:
Sell long 56 December, 2013 (FXA) $89 calls at???..?$5.25
Buy to cover short 56 December, 2013 (FXA) $91 calls a?$3.30
Net Proceeds:????????????....??..??.....$1.95
Profit: $1.95 - $1.80 = $0.15
($0.15 X 100 X 56) = $840 ? 0.84% for the notional $100,000 model portfolio.
