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 - (IWM)
Buy the Russell 2000 iShares (IWM) November, 2014 $117-$120 in-the-money bear put spread at $2.44 or best
Opening Trade
9-23-2014
expiration date: November 21, 2014
Portfolio weighting: 10%
Number of Contracts = 41contracts
You can buy this bear put spread anywhere within a $2.40-$2.50 range and have a reasonable expectation of making money on this trade.
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.
Logic to follow.
If you can?t trade options, then buy the Short Russell 2000 Fund ETF (RWM) as a 1X play, or the Direxion Daily Small Cap Bear 3X ETF (TZA) for a 3X trade.
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:
Buy 41 November, 2014 (IWM) $120 puts at?????$9.21
Sell short 41 November, 2014 (IWM) $117 puts at..??.$6.77
Net Cost:??????????????????.....$2.44
Potential Profit: $3.00 - $2.44 = $0.56
(41 X 100 X $0.56) = $2,296 or 2.30% profit for the notional $100,000 portfolio.
