??AWhen 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 - (FXY) STOP LOSS
SELL the Currency Shares Japanese Yen Trust (FXY) March, 2018 $91-$93 in-the-money vertical bear put spread at $1.75 or best
3-6-2018
Closing Trade
expiration date:??March 16, 2018
Portfolio weighting: 10%
Number of Contracts: 57
This trade was a great idea when I put it on five days ago. However, in this market five days can be five lifetimes.
Once again we have been totally blindsided by an administration move.
The surprise administration action to impose punitive 25% import duties on ALL??foreign steel imports promises to escalate into a global trade war.
It presents the risk of triggering a massive global "RISK OFF" move and a stampede to cover yen shorts.
You do not want to be short the Japanese yen going into a trade war on pain of death.
We have two major risk events ahead of us this week. The president may, or may not sign the punitive tariffs on steel.
Then on Friday May 9 at 8:30 AM EST we get the February Nonfarm Payroll Report. This contains the hourly wages figure which prompted the current correction a month ago.
Going into these releases with a two-yen cushion was enough. A half yen is not.
Risk control demands that we stop out here with a small loss rather than let things run against us.
So, I am selling my position in the Currency Shares Japanese Yen Trust (FXY) March, 2018 $91-$93 in-the-money vertical bear put spread at my $1.75 cost.
You might still have a chance of making the maximum profit on this trade if two unpredictable events go your way.
The best execution for the options 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.
Keep in mind that these are ballpark prices only. Spread pricing can be very volatile, and the liquidity in the options market isn't that great these days.
Here are the specific trades you need to exit this position:
Sell 57 March, 2018 (FXY) $93 puts at....................................................$2.80
Buy to cover short 57 March, 2018 (FXY) $91 puts at..............................$1.05
Net Proceeds:.......................................................................................
Profit: $1.75 - $1.75 = $0.00
(57 X 100 X $0 ) = -0$ or 0% loss
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.
