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)- BUY
BUY the iShares Barclays 20+ Year Treasury Bond Fund (TLT) September, 2016 $133-$136 in-the-money vertical bull CALL spread at $2.72 or best
Opening Trade
9-6-2016
expiration date: September 16, 2016
Portfolio weighting: 10%
Number of Contracts = 37 contracts
YOU CAN PAY UP TO $2.75 FOR THIS POSITION AND IT STILL MAKES SENSE.
In view of Janet Yellen?s and Stanley Fischer?s highly hawkish statements on August 26th, not only one interest rate hike is on the table, BUT TWO!
I don?t think they?ll do it. But the debt markets will be on tenterhooks until the September 20-21 Federal Open Market Committee (FOMC) Meeting, well after this position expires.
This is a bet that the ten-year Treasury bond won?t rise above 1.70% from the current 1.57% by September 16th in 9 trading days.? Said another way, it's a bet that TLT will not trade below $136 by the same date.
With the markets on hold until the September 20 Fed interest rate decision, I think that is unlikely.
If you can?t trade options, stand aside. This is a short-term time decay play.
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 Bull Call 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:
Buy 37 September, 2016 (TLT) $133 calls at????.???$5.70
Sell short 37 September, 2016 (TLT) $136 calls at..????.$2.98
Net Cost:????????????????..??.?.....$2.72
Potential Profit: $3.00 - $2.72 = $0.28
(37 X 100 X $0.28) = $1,036 or 10.29% profit over the next 9 trading days.
