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) November 2022 $400-$410 in-the-money vertical bear put spread at $8.80 or best
Opening Trade
10-17-2022
expiration date: November 18, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
I am going to use today’s impressive 650-point rally to put back out another short to hedge my long positions. It’s clear that the stock market has more probing to do on the downside. Besides, with the Volatility Index (VIX) over $31.00, making money is like shooting fish in a barrel.
If the (SPY) does go up to $400, you will think you have died and gone to heaven, thanks to your long positions. Even though I am turning bullish long term, an extra short position here will reduce your portfolio volatility in case we get another market drawdown in the next 14 trading days.
Therefore, I am recommending the S&P 500 (SPY) November 2022 $400-$410 in-the-money vertical bear put spread at $8.80 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 $9.30 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 $400.00 by the November 18 options expiration day in 24 trading days.
Here are the specific trades you need to execute this position:
Buy 12 November 2022 (SPY) $410 puts at……....….…$43.00
Sell short 12 November 2022 (SPY) $400 puts at…….$34.20
Net Cost:……………….....................………….……….………$8.80
Potential Profit: $10.00 - $8.80 = $1.20
(12 X 100 X $1.20) = $1,440, or 13.64% in 24 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.
