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. This is your chance to ?look over? John Thomas? shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen.
Trade Alert - (SPY)- STOP LOSS
SELL the S&P 500 SPDR?s (SPY) February, 2016 $195-$200 in-the-money vertical bear put spread at $3.45 or best
Closing Trade
2-1-2016
expiration date: February 19, 2016
Portfolio weighting: 10%
Number of Contracts = 23 contracts
The key to this market is to maintain iron discipline and stop out of losses quickly.
So I am NOT going to lean against the Bank of Japan?s surprise negative interest rate QE effort and take small loss on the February, 2016 $195-$200 in-the-money vertical bear put spread.
We still have 14 trading days until expiration, and we are too close to the money to hold on and hope for the best.
The loss here was offset by the profits we made on out deep in the Money (SPY $166-$171 and $170-$175 vertical bull call spreads which we already closed out.
I?m sure than another downdraft is going to occur. I just can?t be certain that will occur in the next two weeks.
I am going to hang on to the (SPY) April $182 puts because the expiration is long and our risk is limited. That?s how we?ll catch that downdraft.
To see how to exit 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 23 February, 2016 (SPY) $200 puts at????.?.??$8.00
Buy to cover short 23 February, 2016 (SPY) $195 puts at?.$4.55
Net Cost:???????????????????......$3.45
Loss: $4.32 - $3.45 = -$0.87
(23 X 100 X -$0.87) = -$2,001. or -2.00% loss for the notional $100,000 portfolio
