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)
Buy the Currency Shares Euro Trust (FXE) April, 2015 $112-$115 in-the-money bear put spread at $2.50 or best
Opening Trade
3-3-2015
expiration date: April 17, 2015
Portfolio weighting: 10%
Number of Contracts = 43 contracts
The Euro is imminently going to break to new seven year lows, so I am more than happy to re establish my short position in the beleaguered continental currency.
Now that the Euro has decisively broken the $1.10 level in the cash market, I think we have a first class express ticket to make it to $1.05.
The trigger is the looming launch or aggressive quantitative easing, which starts on April 1.
The long March towards parity with the buck resumes.
You can buy this put spread anywhere within $2.35-$2.60 and have a reasonable expectation of making money on this trade.
If you don?t trade options, then buy the ProShares Ultra Short Euro ETF (EUO) in the next micro dip.
I am going to keep a fairly tight stop on this because if, for some reason, the euro does magically manage to somehow hold here, a rally of a quick couple of cents could ensue.
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:
Buy 43 April, 2015 (FXE) $115 puts at?????$5.10
Sell short 43 April, 2015 (FXE) $112 puts at..??.$2.60
Net Cost:??????????????????.....$2.50
Potential Profit: $3.00 - $2.35 = $0.50
(43 X 100 X $0.50) = $2,150 or 2.15% profit for the notional $100,000 portfolio.
