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) October 2022 $385-$395 in-the-money vertical bear put spread at $9.20 or best
Opening Trade
10-13-2022
expiration date: October 21, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
I am going to use today’s incredible 1,400-point rally off the bottom in the Dow Average to put back out another short. It’s the biggest one-day move since the 2,000 points days of the pandemic crash 2 ½ years ago. Besides, with the Volatility Index (VIX) at $32, making money is like shooting fish in a barrel.
Therefore, I am recommending the S&P 500 (SPY) October 2022 $385-$395 in-the-money vertical bear put spread at $9.20 or best.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and increase your bid by 5 cents with a second order.
Don’t pay more than $9.50 or you will be chasing.
If you don’t do options, stand aside. This is a short-term options play only.
This is a bet that the S&P 500 (SPY) will not trade above $385.00 by the October 21 options expiration day in 6 trading days.
Here are the specific trades you need to execute this position:
Buy 12 October 2022 (SPY) $395 puts at……....….…$30.00
Sell short 12 October 2022 (SPY) $385 puts at…….$20.80
Net Cost:………………………….………..................………$9.20
Potential Profit: $10.00 - $9.20 = $0.80
(12 X 100 X $0.80) = $960 or 14.94% in 6 trading days.
If you are uncertain about how to execute an options spread, please watch my training video by clicking here.
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.
Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.
