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. This is your chance to ?look over? John Thomas? shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen.
Trade Alert - (SCTY) ? STOP LOSS
SELL the Solar City (SCTY) December, 2014 $47.50-$52.50 in-the-money vertical call spread at $2.75 or best
Closing Trade
12-12-2014
expiration date: December 19, 2014
Portfolio weighting: 10%
Number of Contracts: 22
Great stock, terrible timing.
As much as the fundamentals keep improving for Solar City (SCTY), the shares are being dragged down by the price of oil. Since we added this position on November 25, Texas tea has crashed by an amazing $20, a move of truly Biblical proportions.
Long term, the stock is gearing up for a major move northwards. However, the options market is an impatient beast, and our (SCTY) December, 2014 $47.50-$52.50 in-the-money vertical call spread expires in only five trading days.
As our position is slowly moving out of the money, a continuation of the weakness could cost us big time. So, discretion being the better part of valor, I?m going to bail.
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 22 December, 2014 (SCTY) $47.50 calls at?????$3.50
Buy to cover short 22 December, 2014 (SCTY) $52.50 calls at...$0.75
Net Proceeds:??????????????????.....$2.75
Loss: $4.40 - $2.75 = -$1.65
(22 X 100 X -$1.65) = -$3,630 or -3.63% loss for the notional $100,000 portfolio.
