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.
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Trade Alert - (FXE)- TAKE PROFITS
SELL the Currency Shares Euro Trust (FXE) January, 2017 $106-$109 in-the-money vertical bear put spread at $2.92 or best
Closing Trade
12-15-2016
Expiration Date: January 20, 2017
Portfolio Weighting: 10%
Number of Contracts = 38 contracts
I like making a 13.62% profit in three trading days.
I bet you do too.
I am therefore taking profits on my position in the Currency Shares Euro Trust (FXE) January, 2017 $106-$109 in-the-money vertical bear put spread.
Since we added this position on Monday, the Euro has collapsed a stunning 3% against the dollar, a near record move.
Of course, it helped that I totally nailed the Fed?s move on interest rates yesterday, a hike of only 25 basis points.
Of course, the Euro is now totally toast against the greenback.
By coming out here, I get to dodge the risk of carrying the position for 24 more trading days until the January 20th expiration.
There may be some weird year end effects coming that temporarily juice the Euro, and I want to have the dry powder with which to resell it a couple of points higher.
The Euro is not going to cut through parity like a hot knife through butter. It may turn around here a bit, and could even rally before it makes the final break.
You know, nobody every got fired for taking profits, especially in December. Reaping 81.39% of the maximum potential profit in the trade in three days is good enough for me.
This was a bet that the Currency Shares Euro Trust (FXE) would trade at or below $106 by the January 20th expiration date then 27 trading days in the future.
Readers paid all the way up to $2.75 for this spread and it still made sense.
If you bought the ProShares Ultra Short Euro ETF (EUO), the 2X short Euro fund, take profits here too, as the recent move is so extreme.
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 about how to execute this options spread, please watch my training video ?How to Execute a Bear Put Spread?.
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.
Please keep in mind these are ballpark prices at best. After the text alerts go out, prices can be all over the map. There is no telling how much the market will have moved by the time you get this email.
Paid subscribers, be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a definite trading advantage.? In today's volatile markets, individual investors need every advantage they can get.
Here Are the Specific Trades You Need to Execute This Position:
Sell 38 January 2017 (FXE) $109 puts at????.?.??$8.02
Buy to cover short 38 January 2017 (FXE) $106 puts at...$5.10
Net Proceeds:???????????????????......$2.92
Profit: $2.92 - $2.57 = $0.35
(38 X 100 X $0.35) = $1,330 or 13.62% in 3 trading days
