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 - (TLT) TAKE PROFITS
SELL the iShares Barclays 20+ Year Treasury Bond Fund (TLT)September, 2017 $129-$132 in-the-money vertical BEAR PUT spread at $2.72 or best
Closing Trade-NOT FOR NEW SUBSCRIBERS
8-24-2017
expiration date: September 15, 2017
Portfolio weighting: 10%
Number of Contracts = 38 contracts
I am taking a small profit in the (TLT) here for the following reasons:
1) The short term trend is still against us.
2) There are better things to do with the money.
3) We may get a chance to reenter this position at better prices.
4) No one ever got fired for taking a profit
5) There is a big Nazi rally in San Francisco this weekend, and if anyone gets killed you could have a big "RISK OFF" day in the markets on Monday.
By coming out here we get to realize a $456, or 4.61% profit in only four trading days.
I still think we are solidly in to a new 10-20 year bear market in bonds, so I will be back on the short side soon.
With this Trade Alert the Mad Hedge Fund Trader service is up 38% in 2017, with the last 21 consecutive Trade Alerts profitable.
Whenever this happens, I automatically get cautious.
If you bought the ProShares Ultra Short 20+ Treasury Bond Fund (TBT), a bet that bonds will fall, keep it. You don't have to worry about expirations with this ETF, and it has much higher to go.
Well done, and on to the next trade!
To see how to enter this trade in your online platform, please look at the order ticket below, 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 a Vertical Bear Put Spread by clicking here at
http://members.
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.
Here are the specific trades you need to execute this position:
Sell 38 September, 2017 (TLT) $132 puts at..................................$5.50
Buy to cover short 38 September, 2017 (TLT) $129 puts.................$2.78
Net Proceeds:.................................................................................$2.72
Profit: $2.72 - $2.60 = $0.12
(38 X 100 X $0.12) = $456 or 4.61% in 4 trading days.
