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 - (SPY)- STOP LOSS
SELL the S&P 500 SPDR?s (SPY) March, 2016 $201-$204 in-the-money vertical bear put debit spread at $2.23 or best
Closing Trade-NOT FOR NEW SUBSCRIBERS
3-4-2016
expiration date: March 18, 2016
Portfolio weighting: 10%
Number of Contracts = 39 contracts
The unprecedented short squeeze continues.
Time to stop out of this position before it starts to inflict some real damage.
Of course, it took a three-week, 11% move against us to lose money on this position, one of the sharpest in history. But that?s what we got.
You have to trade with the market you have, not the one you want.
Maintaining iron stop loss discipline is the key to winning in this kind of market.
This loss will be more than offset by the triple long weighting in the (SPY) we had on the way up in this monster rally, as well as the long position in gold (GLD) and the short in the Japanese yen (FXY).
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of optionshouse.
If you are uncertain on how to execute an options spread, please watch my training video on ?How to Execute a Vertical Bear Put Debit Spread? by clicking here at https://www.madhedgefundtrader.com/ltt-executetradealerts/. You must me logged into your account to view the video.
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 39 March, 2016 (SPY) $204 puts at????.?.??$6.30
Buy to cover short 39 March, 2016 (SPY) $201 puts at.?..$4.07
Net Cost:???????????????????......$2.23
Loss: $2.60 - $2.23 = -$0.37
(39 X 100 X -$0.38) = -$1,443 or -1.44% loss for the notional $100,000 portfolio
