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 - (SPY) ? BUY TO DOUBLE UP
BUY AGAIN the S&P 500 (SPY)?May, 2018 $277-$280 in-the-money vertical bear put spread at $2.60 or best
Opening Trade
4-13-2018
expiration date:?May 18, 2018
Portfolio weighting: INCREASE FROM 10% TO 20%
Number of Contracts = 40 contracts
This is a ?Heads I win, tails you lose? trade.
If the market goes sideways of down over the next month, you get to keep the entire 22% profit in this position, better than a poke in the eye with a sharp stick.
If the market sideways goes up, you can book the best trading profit of the year, thanks the hefty longs in an array of ?RISK ON? POSITIONS? that you have been buying for the last two weeks.
And the day to day volatility of the combined trading books is so low that you will be able to blissfully sleep through any raining missiles, trade wars, or Tweet storms that may come.
Yes, we are about to make out entire year in the coming month, after which I will go on a long cruise. You should too
This is a bet that the (SPY) will not trade above $277 at the?May 18expiration date in?25 trading days.?
Don?t pay more than?$2.75?for this position or you?ll be chasing.
If you don?t do options stand aside. This is a rare case where you really need the protection only available through options. I don?t want to sell short the market outright here.
Here are the specific trades you need to execute this position:
Buy 40 May 2018 (SPY) $280 puts at??.???$16.00
Sell short 40 May 2018 (SPY) $277 puts at???.$13.40
Net Cost:??????????.????..??.?....
Potential Profit: $3.00 - $2.60 = $0.40
(40 X 100 X $0.40) = $1,600 or 15.38% in 25 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.
