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. This is your chance to ?look over? John Thomas? shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen.
Trade Alert - (TLT)- STOP LOSS
SELL the iShares Barclays 20+ Year Treasury Bond Fund (TLT) February, 2016 $130-$133 in-the-money vertical bear put spread at $2.36 or best
Closing Trade
2-3-2016
expiration date: February 19, 2016
Portfolio weighting: 10%
Number of Contracts = 39 contracts
There is clearly something unprecedented in the history of the financial markets going on. In 50 years of trading, I have never seen such a disconnect between the health of the US economy and the stock market.
Ten year Japanese government bonds yielding 6 basis points? The Ten year US Treasury bond (TLT) yielding 1.86% in a 2% a year growing US GDP? A 60 basis FALL in the yield since the last Federal Reserve interest rate RISE?
Unbelievable!
I and therefore going to stop out of my position in the iShares Barclays 20+ Year Treasury Bond Fund (TLT) February, 2016 $130-$133 in-the-money vertical bear put spread with a small loss.
With 12 trading days to go, I CAN?T be certain that the ten-year Treasury bond won?t dip below 1.75% by February 19, from the current 1.87%.
1.75% is below the yield we saw for a few nanoseconds during the August 24 flash crash.
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 Vertical Bear Put Spread? by clicking here at
https://www.madhedgefundtrader.com/ltt-vbpds/
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:
Sell 39 February, 2016 (TLT) $133 puts at????.???$4.80
Buy to cover short 39 February, 2016 (TLT) $130 puts ??.$2.44
Net Cost:????????????????..??.?.....$2.36
Loss: $2.57 - $2.36 = -$0.21
(39 X 100 X -$0.21) = -$819 or -0.82% loss for the notional $100,000 portfolio.
