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 $410-$420 in-the-money vertical bear put spread at $8.80 or best
Opening Trade
9-19-2022
expiration date: October 21, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
Since the disastrous CPI report last week, it looks like markets may have to correct for another month or two before we see a turnaround. So, adding another short-term short position seems prudent here. The Volatility Index (VIX) at $28 also gives us a decent entry point.
The CPI at a new high delays the start of the next full market by one or two months. The Federals Reserve really needs to see two consecutive CPI rises to stop raising interest rates. This also means that I have to put my (SPY) $4,800 off until 2023.
Therefore, I am recommending the S&P 500 (SPY) October 2022 $410-$420 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 $410.00 by the October 21 options expiration day in 24 trading days.
Here are the specific trades you need to execute this position:
Buy 12 October 2022 (SPY) $420 puts at………....…$35.00
Sell short 12 October 2022 (SPY) $410 puts at…….$26.20
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.
