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
Buy the S&P 500 SPDR?s (SPY) March, 2016 $200-$205 in-the-money vertical bear put spread at $4.08 or best
Opening Trade
1-29-2016
expiration date: March 18, 2016
Portfolio weighting: 10%
Number of Contracts = 24 contracts
You can pay all the way up to $4.25 for this spread and it still makes sense.
If you can?t do the options, buy the ProShares Short S&P 500 Short Fund ETF (SH), or the ProShares Ultra Short S&P 500 Short Fund 2X ETF (SDS).
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:
Buy 24 March, 2016 (SPY) $205 puts at????.?.??$14.80
Sell short 24 March, 2016 (SPY) $200 puts at.????..$10.72
Net Cost:???????????????????......$4.08
Potential Profit: $5.00 - $4.08 = $0.92
(24 X 100 X $0.92) = $2,208 or 2.21% profit for the notional $100,000 portfolio
