When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.
Trade Alert - (SPY) - BUY
BUY the S&P 500 (SPY) September, 2018 $255 puts outright at $3.40 or best
Opening Trade
5-14-2018
expiration date: September 21, 2018
Portfolio weighting: 5%
Number of Contracts = 15 contracts
I think the market has gone up for seven consecutive days because we have had a brief respite from bad new, not because of any shocking, unexpected good news.
So, stocks are NOT about to break out to new all-time highs. That is second half business.
All we are really doing here unwinding the fictions that were rife only a month ago, like the chip sector had hit a cyclical peak (MU), (INTC), Apple (AAPL) was no longer innovative, and Facebook (FB) was going out of business.
The bottom line here, which traders are ignoring, is that both interest rates and oil prices are rising, the twin killers of all bull markets.
Lenders and energy producers benefit from this situation, while borrowers and energy consumers lose. Which one are you?
All this means that we are still stuck in a wide trading range that may las until the November midterm elections.
This is a bet that the (SPY) will fall sometime in the next four months. Now that we are in a period of seasonal weakness, that sounds like a pretty safe bet.
Don't pay more than $4.00 for this position or you'll be chasing.
If you don't do options stand aside. This is a rare case where you really need the protection only available through options. I don't want to sell short the market outright here.
Here are the specific trades you need to execute this position:
Buy 15 September 2018 (SPY) $255 puts at...............$3.40
Total Cost = ($3.40 X 15 contracts X 100) = $5,100
To see how to enter this trade in your online platform, please look at the order ticket above, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video on How to Execute Vertical Call and Put Debit Spreads by clicking here.
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Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
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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 close to expiration.
If you don't get done, don't worry. There are another 250 Trade Alerts coming at you over the coming 12 months.