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) April, 2016 $208-$213 in-the-money vertical bear put spread at $4.20 or best
Closing Trade
4-4-2016
expiration date: April 15, 2016
Portfolio weighting: 10%
Number of Contracts = 22 contracts
I am going to stop out here with a small loss. Even with a 10% fall in the price of oil, this short-term uptrend in the S&P 500 still is too hard to break.
As we approach the April 15 expiration date, the risk reward is turning against us. We are running out of time for this trade to turn good. Iron stop loss discipline has kept me from going broke this year, and I see no reason to stop now.
If you bought the ProShares Short S&P 500 Short Fund ETF (SH) (click here for the prospectus at http://www.proshares.com/funds/sh.html), or the ProShares Ultra Short S&P 500 Short Fund 2X ETF (SDS) (click here for the prospectus at http://www.proshares.com/funds/sds.html), keep it.
I?m sure the market is going to roll over in the next month. It has gone too far too fast, the upside resistance on the charts from here is massive, and we are about to enter six months of seasonal market weakness.
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 22 April, 2016 (SPY) $213 puts at????.?.??$6.80
Buy to cover short 22 April, 2016 (SPY) $208 puts at.?..$2.60
Net Cost:???????????????????......$4.20
Loss: $4.45 - $4.20 = -$0.25
(22 X 100 X -$0.25) = -$550 or -5.62% loss
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