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 - (QCOM) ? TAKE PROFITS
Sell the QUALCOMM (QCOM) February, 2015 $75-$80 in-the-money bear put spread at $4.90 or best
Closing Trade
1-29-2015
expiration date: February 20, 2015
Portfolio weighting: 10%
Number of Contracts = 25 contracts
You can SELL the QUALCOMM (QCOM) February, 2015 $75-$80 in-the-money bear put spread anywhere in the $4.70 to $4.90 range and lock in your second home run of the year (the first one was your short position in the Euro).
If you are short the stock outright, cover here as fast as you can.
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.
We are so deep-in-the-money with the QUALCOMM (QCOM) February, 2015 $75-$80 bear put spread that the liquidity for these options will be poor. You may have to experiment as to where the real bid is, starting high, and then moving down incrementally if you don?t get done.
Worst case, you can just run this into expiration and avoid paying the extra commission. It is safe to say that you can market this one in the ?WIN? column.
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.
Here are the specific trades you need to execute this position:
Sell 25 February, 2015 (QCOM) $80 puts at?????$15.00
Buy to Cover short 25 February, 2015 (QCOM) $75 puts at?$10.10
Net Cost:??????????????????.....$4.90
Potential Profit: $4.90 - $4.05 = $0.85
(25 X 100 X $0.85) = $2,125 or 2.13% profit for the notional $100,000 portfolio.
