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)
Buy the S&P 500 SPDR?s (SPY) September, 2015 $207-$210 in-the-money vertical bear put spread at $2.52 or best
Opening Trade
8-28-2015
expiration date: September 18, 2015
Portfolio weighting: 10%
Number of Contracts = 39 contracts
You can pay all the way up to $2.70 for this spread and it still makes sense. If you can?t do options, buy the ProShares Ultra Short S&P 500 2X ETF (SDS) instead (click here for a full fun description at http://www.proshares.com/funds/sds.html).
In any case, I plan to be out of this baby well before the Federal Reserve interest rate decision on September 17.
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:
Buy 39 September, 2015 (SPY) $210 puts at????.??$12.60
Sell short 39 September, 2015 (SPY) $207 puts at????..?$10.08
Net Cost:?????????????????????.....$2.52
Potential Profit at expiration: $3.00 - $2.52 = $0.48
(39 X 100 X $0.48) = $1,872 or 1.87% profit for the notional $100,000 portfolio.
