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) ? SELL SHORT
Buy the Currency Shares Euro Trust (FXE) April, 2015 $109-$112 in-the-money bear put spread at $2.56 or best
Opening Trade
3-27-2015
expiration date: April 17, 2015
Portfolio weighting: 10%
Number of Contracts = 39 contracts
The Euro is now in the tag ends of a short covering rally, so I am more than happy to dive back in on the short side of the beleaguered continental currency. After a two-week hiatus, it is now pedal to the metal.
With the European Central Bank now only ten days into flooding the continental money supply through quantitative easing, I think the 50 day moving average $109.77 for the (FXE) is going to prove insurmountable.
You can buy this put spread anywhere within $2.50-$2.70 range and have a reasonable expectation of making money on this trade. Remember, there are only 15 trading days to expiration.
If you don?t trade options, then buy the ProShares Ultra Short Euro ETF (EUO), which is now down more than 10% from its recent peak.
The long March towards parity with the buck resumes.
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:
Buy 39 April, 2015 (FXE) $112 puts at?????$5.15
Sell short 39 April, 2015 (FXE) $109 puts at..??.$2.59
Net Cost:??????????????????.....$2.56
Potential Profit: $3.00 - $2.56 = $0.44
(39 X 100 X $0.44) = $1,716 or 1.71% profit for the notional $100,000 portfolio.
