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
?RISK OFF?
Buy the S&P 500 SPDR?s (SPY) November, 2015 $207-$210 in-the-money vertical bear put spread at $2.45 or best
Opening Trade
10-14-2015
expiration date: November 20, 2015
Portfolio weighting: 10%
Number of Contracts = 38 contracts
You can pay all the way up to $2.65 for this spread and it still makes sense. If you can?t do options buy the (SDS) for a short term trade.
It is a bet that the (SPY) does not trade above $207 in the next 26 trading days.
The market has just enjoyed a short covering rally for the ages, up 9 out of the last 11 days. It is waaaaay overbought.
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 Bull Call Spread? by clicking here https://www.madhedgefundtrader.com/ltt-executetradealerts/.
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 38 November, 2015 (SPY) $210 puts at????.?.??$10.65
Sell short 38 November, 2015 (SPY) $207 puts at????..?$8.20
Net Cost:?????????????????????.....$2.45
Potential Profit at expiration: $3.00 - $2.45 = $0.55
(38 X 100 X $0.55) = $2,090 or 2.09% profit for the notional $100,000 portfolio.
