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 Currency Shares Euro Trust (FXE) December, 2017 $116-$118 in-the-money vertical bear put spread at $1.78 or best
Opening Trade
11-14-2017
expiration date: December 15, 2017
Portfolio weighting: 10%
Number of Contracts = 56 contracts
We received a gift overnight in the form of a huge spike in the Euro (FXE) on the back of strong German GDP figures.
As amazing as it may seem, Europe is now growing faster than the 3% recently seen in the US economy, potentially bringing forward the end of its own quantitative easing program of monetary expansion.
This is Euro positive.
However, I believe the seminal event of the coming year will be the faster rise of US interest rates.
Interest rate differentials are far and away the largest driver of foreign exchange markets.
In the meantime, Europe will continue to signal that their rates will continue to stay lower for longer.
Longer term, this is all Euro negative.
Rising dollar rates, falling Euro rates, sounds like a trade to me.
I am therefore buying the Currency Shares Euro Trust (FXE) December, 2017 $116-$118 in-the-money vertical bear put spread at $1.78 or best.
Keep in mind that liquidity in the Euro market is usually poor after the Continent shuts down for the day, so get done what you can, but only at your prices.
This is a bet that the (FXE) will trade at or below $116 by the December 15expiration date, compared to the current $113.76 in 23 trading days.
You can pay all the way up to $1.85 for this spread and it still makes sense.
If you can't trade options, then buy the ProShares Ultra Short Euro ETF (EUO), the 2X short Euro fund, a bet that the Euro will fall against the greenback.
Here are the specific trades you need to execute this position:
Buy 56 December, 2017 (FXE) $118 puts at.....................................$4.40
Sell short 56 December, 2017 (FXE) $116 puts at.................................$2.62
Net Cost:............................................................................................
Potential Profit: $2.00 - $1.78 = $0.22
(56 X 100 X $0.22) = $1,425 or 112.36% in 23 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.
You must be logged into your account to view the video.
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.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In today's market, investors need every advantage they can get.
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.
