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)- STOP LOSS
SELL the S&P 500 SPDR?s (SPY) April, 2016 $205-$210 in-the-money vertical bear put spread at $3.99 or best
Closing Trade
3-16-2016
expiration date: April 15, 2016
Portfolio weighting: 10%
Number of Contracts = 24 contracts
I am going to use this opportunity to get out close to cost. The market is giving us a free pass on the Fed announcement. We can always reassess the strategy on the other side of the Fed announcement in a few minutes.
If Janet does turn hawkish and the market does collapse after the Fed announcement we will still participate with out shorts in the Russell 2000 and our (SPY) April $185 puts.
I can always re establish on the downside.
However, if you have the ProShares Short S&P 500 Short Fund ETF (SH) (click here for the prospectus at http://www.proshares.com/funds/sh.html), or the ProShares Ultra Short S&P 500 Short Fund 2X ETF (SDS) (click here for the prospectus at http://www.proshares.com/funds/sds.html) keep them for a larger fall over a longer period.
You are not slave to the options calendar.
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:
Sell 24 April, 2016 (SPY) $210 puts at????.?.??$9.40
Buy to cover short 24 April, 2016 (SPY) $205 puts at?..$5.41
Net Proceeds:????????????????......$3.99
Loss: $4.05 - $3.99 = -$0.06
(24 X 100 X -$0.06) = -$144 or -1.48% loss for the notional $100,000 portfolio
