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 - (FXE)
Sell the Currency Shares Euro Trust (FXE) September, 2014 $133-$135 in-the-money bear put spread at $1.98 or best
Closing Trade
8-26-2014
expiration date: September 19, 2014
Portfolio weighting: 10% down to zero
Number of Contracts = 55 contracts
We have captured 89% of the potential profit in this trade, riding the Euro (FXE) down on the short side, from $1.33 down to the $1.29 handle as of this morning. There is no money left in this sucker. The risk/reward of continuing with such a large position is no longer justified.
So I am going to reduce my position down from 10% to zero. If you are similarly overweight the short Euro ETF (EUO), I would also be lightening up. However, if you are a longer term investor, you probably want to hang on to the (EUO), it is such a winner of a trade.
I have not suddenly fallen in love with the beleaguered continental currency. I think we are headed towards $1.27, $1.20, and eventually $1.00. This is just a tactical move.
That way, if by some miracle, we get a two-cent rally in the Euro, I will have plenty of dry powder to reload with and add more shorts.
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 5% 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 55 September, 2014 (FXE) $135 puts at?????$5.18
Buy to cover short 55 September, 2014 (FXE) $133 puts at...$3.20
Net Proceeds:??????????????????.....$1.98
Profit: $1.98 - $1.81 = $0.17
(61 X 100 X $0.17) = $1,037 or 1.04% profit for the notional $100,000 portfolio.
