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)- TAKE PROFITS
SELL the S&P 500 SPDR?s (SPY) February, 2016 $170-$175 in-the-money vertical bull call spread at $4.83 or best
Closing Trade
1-29-2016
expiration date: February 19, 2016
Portfolio weighting: 10%
Number of Contracts = 23 contracts
I am going to use the global ?RISK ON? rally triggered by the latest round of Japanese QE to take profits on the S&P 500 SPDR?s (SPY) February, 2016 $170-$175 in-the-money vertical bull call spread.
At these prices we have harvested 76.5% of the maximum potential profit. We have made a healthy 12.9% profit in nine trading days, capturing a full $9 handle move in the (SPY).
In some of the most difficult trading conditions in market history, that?s good enough for me.
The Volatility Index (VIX) almost dipping down to $20 is another red flag warning one to cut back long exposures.
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 Bull Call 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) $170 calls at????.?.??$21.70
Buy to cover short 23 February, 2016 (SPY) $175 calls at.?..$16.87
Net Cost:???????????????????......$4.83
Profit: $4.83 - $4.28 = $0.55
(23 X 100 X $0.55) = $1,265 or 1.27% profit for the notional $100,000 portfolio
