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) - BUY
BUY the iShares Barclays 20+ Year Treasury Bond Fund (TLT) February, 2018 $114-$117 in-the-money vertical BULL CALL spread at $2.70 or best
Opening Trade
2-5-2018
expiration date: February 16, 2018
Portfolio weighting: 10%
Number of Contracts = 37 contracts
I think the bond rout has had it for the time being. A 45-basis point swan dive in a single month is enough.
While I am certain that ten-year US Treasury bond yields will surpass 3.0% this year, it's not going to happen in the next 8 trading days.
As long as that is the case, you will make a profit on the iShares Barclays 20+ Year Treasury Bond Fund (TLT) February, 2018 $114-$117 in-the-money vertical BULL CALL spread.
Don't pay more than $2.80 for this position or you'll be chasing.
This will also be a nice hedge for our remaining three positions.
If you don't do options, stand aside. This is just a short-term expiration play and you should bet against the long-term trend.
Here are the specific trades you need to execute this position:
Buy 37 February, 2018 (TLT) $114 calls at...............................................$5.60
Sell short 37 February, 2018 (TLT) $117 calls at.........................................$2.90
Net Cost:...................................................................................................$2.70
Potential Profit: $3.00 - $2.70 = $0.30
(37 X 100 X $0.30) = $1,110 or 11.11%% in 18 trading days.
To see how to enter this trade in your online platform, please look at the order ticket above, 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 Vertical Call and Put Debit Spreads by clicking here.
You must be logged into your account to view the video.
Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In today's market, investors need every advantage they can get.
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 close to expiration.
If you don't get done, don't worry. There are another 250 Trade Alerts coming at you over the coming 12 months.
