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 - (FXE) – BUY
BUY the Invesco Currency Shares Euro Trust (FXE) February 2019 $105-$108 in-the-money vertical BULL CALL spread at $2.60 or up to $2.70
Opening Trade
1-7-2019
expiration date: February 15, 2019
Portfolio weighting: 10%
Number of Contracts = 38 contracts
With Fed governor Jay Powell giving us the all clear on Friday on interest rates for the next six months, I am looking for more weak dollar and long technology plays.
I already loaded the boat with tech last week and a double short bond plays. I can’t add more there without overconcentrating the portfolio and increasing my risk. I must diversify asset classes to prosper and to sleep better at night.
What’s next? Buying the Euro.
This is a bet as long as interest rate hikes pause, the US dollar will fall and the continental currency will rise. What’s next on the menu? Buy emerging markets (EEM) and oil (USO), which also benefit from a flaccid greenback.
This is a bet that the Euro (FXE) will not trade below $108 by the February 15 option expiration day in 28 trading days.
Don’t pay more than $2.70 for this position or you’ll be chasing. These are fairly illiquid options during US trading hours, as most of the action takes place in Europe when you are still in bed.
If you can’t get your price, walk away. Just put your limit order in and set it in stone. There will be 200 more trade alerts coming this year.
If you don’t do options, buy the Euro outright. There could be a 5%-10% move up unfolding.
Here are the specific trades you need to execute this position:
Buy 38 February 2019 (FXE) $105 calls at………….………$6.00
Sell short 38 February 2019 (FXE) $108 calls at………….$3.40
Net Cost:……………………..…….………..………….….....$2.60
Potential Profit: $3.00 - $2.60 = $0.40
(38 X 100 X $0.40) = $1,520 or 15.38% in 28 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.
