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.
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Trade Alert - (USO)- TAKE PROFITS
SELL the United States Oil Fund (USO) November, 2016 $12.50-$14.00 in-the-money vertical bear put spread at $1.46 or best
Closing Trade-NOT FOR NEW SUBSCRIBERS
10-24-2016
Expiration Date: November 18, 2016
Portfolio Weighting: 10%
Number of Contracts = 75 contracts
As I suspected, the credibility of the OPEC Algiers production capping agreement is about zero.
Saudi Arabia, Iran, and Iraq are all ramping up production going into the November 30th deadline; the track record of compliance is not great.
I am therefore going to take profits on my position in the United States Oil Fund (USO) November, 2016 $12.50-$14.00 in-the-money vertical bear put spread.
On the back of this morning?s 2.1% plunge in crude, we can realize 77.7% of the maximum potion profit in the position.
Leave it for others to hang on for 19 more trading days, through the presidential election, to realize the last 22.3%.
Good luck doing that in the oil market.
With this trade, 13 out of the last 14 trade alerts issued by the Mad Hedge Fund Trader are profitable.
If you bought the ProShares Ultra Short Bloomberg Crude Oil ETF (SCO) instead of the options, please sell it for a quick trade.
The concept behind this trade was really very simple.
This was a bet that the United States Oil Fund (USO) would not rise above $12.50 by the November 18th expiration date, a new high for 2016.
An agreement to cap production at the Algiers OPEC meeting delivered a monster 20.40% short covering rally in oil. The quotas will be fixed at the next OPEC meeting in Vienna on November 30th.
However, not a single person in the industry believes the agreement will be finalized or, if finalized, honored. Cheating inside OPEC is legendary. The Saudis know this.
Therefore, I thought oil would put in a short-term top, and then trade sideways to down for the next month.
In addition, the $51/barrel I saw on my screen was going to stimulate a ton of new production from US frackers.
Thanks to rapidly accelerating technology, American drillers can turn oil production on and off faster than at any time in history.
Also to consider are Iraq?s military victories against ISIS, and the outbreak of stability in Libya, both of which will generate substantial new oil supplies.
I think the bear market in oil is over, thanks to a recovering global economy. To read more about this, click Oil's Long Nightmare Is Over??
I just didn?t think we were blasting though to a new yearly high in oil in the next 28 trading days, given the OPEC dynamics. Hence, the trade alert.
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 about how to execute an options spread, please watch my training video How to Execute a Vertical Bear Put Debit Spread
Please keep in mind these are ballpark prices at best. After the text alerts go out, prices can be all over the map. There is no telling how much the market will have moved by the time you get this email.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage.? In today's volatile markets, individual 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 across platforms.
Here Are the Specific Trades You Need to Execute This Position:
Sell 75 November, 2016 (USO) $14.00 puts at????.??$2.80
Buy to cover short 75 October, 2016 (USO) $12.50 puts a.?..$1.34
Net Proceeds:??????????????????......$1.46
Profit: $1.46 - $1.32 = $0.14
(75 X 100 X $0.14) = $1,050, or 10.61% profit in 9 trading days.
