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 the Currency Shares Euro Trust (FXE) October, 2014 $128-$130 in-the-money bear put spread at $1.98 or best
Closing Trade
9-30-2014
expiration date: October 17, 2014
Portfolio weighting: 10%
Number of Contracts = 58 contracts
You can sell the Currency Shares Euro Trust (FXE) October, 2014 $128-$130 in-the-money bear put anywhere within a $1.90-$2.00 range and have an outstanding profit.
At $1.98, we have realized 92% of the maximum potential profit of this position, so the risk/reward of pressing on is no longer in your favor. That works out to an 11-day profit of 15%, which is not too shabby in this volatile, choppy environment.
Similarly, you have made a killing owning the (EUO), if that was your preferred instrument of combat. The Euro has had such a sharp fall that you might want to start peeling some off here. It topped $20 this morning, up from only $17.75 in just two months.
I am keeping my other 10% position in the Currency Shares Euro Trust (FXE) November, 2014 $128-$130 in-the-money bear put spread, as I believe the medium term direction of the beleaguered continental currency is still southward.
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:
Sell 58 October, 2014 (FXE) $130 puts at?????$5.65
Buy to cover short 58 October, 2014 (FXE) $128 puts at..??.$3.67
Net Cost:??????????????????.....$1.98
Potential Profit: $1.98 - $1.73 = $0.25
(58 X 100 X $0.25) = $1,450 or 1.45% profit for the notional $100,000 portfolio.
