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)
Sell the SPDR S&P 500 (SPY) March, 2014 $189-$192 bear put spread at $2.22 or best
Closing Trade
3-6-2014
expiration date: March 21, 2014
Portfolio weighting: 10%
Number of Contracts = 37 contracts
Time to take our downside protection off, now that stocks everywhere are breaking out to the upside.
The small loss we took on the SPDR S&P 500 March, 2014 $189-$192 bear put spread, was more than generously offset by the profits on our other ?RISK ON? positions. Better to take the hedge off now in case this thing goes ballistic against us after the nonfarm payroll tomorrow.
It is the first loss for our model trading portfolio from a trade initiated in 2014. As Lawrence of Arabia once said, ?So I?m not perfect after all.?
The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the trade to come to you. The middle market is the halfway point between the bid and the offered prices that you see on your screen with your online broker.
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. Keep in mind that these are ballpark prices only. Spread pricing can be very volatile especially on expiration months farther out.
Here are the specific trades you need to execute this position:
Sell 37 March, 2014 (SPY) $192 puts at??.????$4.62
Buy to cover short 37 March, 2014 (SPY) $189 puts at??..?..$2.40
Net Cost:????????.???????..??....$2.22
Loss: $2.67 - $2.22 = $0.45
(37 X 100 X -$0.45) = -$1,665 or -1.67% loss for the notional $100,000 portfolio.
