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 - (GLD) - BUY
Buy the SPDR Gold Shares ETF (GLD) March 2019 $119-$122 in-the-money vertical BULL CALL spread at $2.60 or up to $2.75
Opening Trade
2-12-2019
expiration date: March 15, 2019
Portfolio weighting: 10%
Number of Contracts = 38 contracts
With the stock market up 400 Dow points and the Mad Hedge Market Timing Index at a loft 67, it doesn’t get any worse than this for gold. I am therefore going to buy gold.
Even with a huge “RISK ON” day underway, smart portfolio managers, traders and hedge funds are loading up on the barbarous relic.
I have been trying to buy the yellow meal all year but haven’t gotten a decent dip with which to buy it. Here is a small one.
I am therefore buy the SPDR Gold Shares ETF (GLD) March 2019 $119-$122 in-the-money vertical BULL CALL spread at $2.60 or best.
Don’t pay more than $2,75 or the risk/reward will tip against you.
This is a bet that (GLD) ETF won’t fall below $122.00 by the March 15 expiration date in 22 trading days.
Here are the specific trades you need to execute this position:
Buy 38 March 2019 (GLD) $119 calls at………….………$5.00
Sell short 38 March 2019 (GLD) $122 calls at..………….$2.40
Net Cost:…………………………………………..…….….....$2.60
Potential Profit: $3.00 - $2.60 = $0.40
(38 X 100 X $0.40) = $1,520 or 15.38% in 22 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.
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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.
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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.
