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)- TAKE PROFITS
Sell the S&P 500 SPDR?s (SPY) August, 2015 $214-$217 in-the-money vertical bear put spread at $2.97 or best
Closing Trade
8-12-2015
expiration date: August 21, 2015
Portfolio weighting: 20% back down to 10%
Number of Contracts = 40 contracts
We may be seeing a capitulation sell off this morning in US stocks.
It is therefore an ideal time to cut our position in half in the S&P 500 SPDR?s (SPY) August, 2015 $214-$217 in-the-money vertical bear put spread.
At this morning?s opening price of $2.97, you have earned a profit of 18.8% during a period of weeks when almost the entire rest of the world was losing their shirts. There is only three cents left to be gained running it into the August 21 expiration in seven trading days.
I rarely run double positions that account for 20% of my portfolio. So I will be quicker than usual to take profits here.
Dry powder has more value than usual right now, as there are so many great opportunities to be found in these apparently grim conditions. I shall be writing about these shortly.
The world is not ending. It is just pretending to do so.
Well done, and on to the next trade.
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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 40 August, 2015 (SPY) $217 puts at??????.??$9.83
Buy to cover short 40 August, 2015 (SPY) $214 puts at?..?$6.86
Net Proceeds:??????????????????.....$2.97
Profit: $2.97 - $2.50 = $0.47
(40 X 100 X $0.47) = $1,880 or 1.88% profit for the notional $100,000 portfolio.
