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.
Trade Alert - (FXE)- STOP LOSS
SELL the Currency Shares Euro Trust (FXE) March, 2016 $103-$106 in-the-money vertical bull call spread at $2.08 or best
Closing Trade - NOT FOR NEW SUBSCRIBERS
3-2-2016
expiration date: March 18, 2016
Portfolio weighting: 10%
Number of Contracts = 38 contracts
If there is one lesson to learn this year it has been to maintain a rigid stop loss discipline.
Beside, whatever I lose on this position I will make back on its hedge, my short Japanese yen (FXY) position.
We got ambushed on our long Euro position here buy a sudden swing in the polls in favor of taking the United Kingdom out of the European Community. This would be an economic disaster for both entities.
On top of this, ECB president Mario Draghi may announce another round of quantitative easing next week. Or he may not.
If he does, I will be the hero for stopping out of this position for a sub 2% loss. If he doesn?t the Euro will rocket and this position will expire at its maximum profit point, and I will be the goat.
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/. You must me logged into your account to view the video.
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 38 March, 2016 (FXE) $103 calls at????.?.??$3.25
Buy to cover short 38 March, 2016 (FXE) $106 calls at.?..$1.17
Net Cost:???????????????????......$2.08
Loss: $2.60 - $2.08 = -$0.52
(38 X 100 X -$0.52) = -$1,976 or -1.98% loss for the notional $100,000 portfolio
