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 - (SPY) - BUY
Buy the S&P 500 (SPY) May 2023 $420-$430 in-the-money vertical bear put spread at $8.30 or best
Opening Trade
4-20-2023
expiration date: May 21, 2023
Portfolio weighting: 10%
Number of Contracts = 12 contracts
Where is the upside surprise coming from?
It's hard to see the (SPY) blasting through to a new all-time high in the next four weeks. The strong earnings reports from the banks are out, the weak earnings reports are coming.
The seasonals are about to turn harshly against the market. After reaching an unbelievable height, I expect the market to blow up, just like Elon Musk’s ill-fated Starship.
If the (SPY) does go up to $420, you will think you have died and gone to Heaven, thanks to your existing long positions. Even though I am bullish long term, an extra short position here will reduce your portfolio volatility in case we get another market draw down in the next month.
Therefore, I am recommending the S&P 500 (SPY) May 2023 $420-$430 in-the-money vertical bear put spread at $8.30 or best.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and increase your bid by 5 cents with a second order.
Don’t pay more than $9.30 or you will be chasing.
If you don’t do options, stand aside. This is a short-term options play only.
This is a bet that the S&P 500 (SPY) will not trade above $420.00 by the May 19 option expiration day in 21 trading days.
Here are the specific trades you need to execute this position:
Buy 12 May 2023 (SPY) $430 puts at…….......….…$19.00
Sell short 12 May 2023 (SPY) $420 puts at…....….$10.70
Net Cost:…………………………................……….………$8.30
Potential Profit: $10.00 - $8.30 = $1.70
(12 X 100 X $1.70) = $2,040, or 20.48% in 21 trading days.
If you are uncertain about how to execute an options spread, please watch my training video by clicking here.
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.
Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.
