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 - (VXX)- STOP LOSS
SELL the iPath S&P 500 VIX Short Term Futures ETN (VXX) December, 2016 $24-$27 in-the-money vertical bull call spread at $1.60 or best
Closing Trade
12-6-2016
Expiration Date: December 16, 2016
Portfolio Weighting: 10%
Number of Contracts = 41 contracts
I have hit my maximum pain threshold on my position in the iPath S&P 500 VIX Short Term Futures ETN (VXX) December, 2016 $24-$27 in-the-money vertical bull call spread, so I am stopping out here.
To see the ($VIX) fall 13% in two days on no real market move is nothing less than amazing. To see it plunge 47% since the November 8th presidential election is even more incredible.
The market seems to be taking out the entire month of December from the volatility market.
This makes no sense.
But then it has been a solid year of amazing moves. When I don?t understand something the market is doing, I dump the position like a hot potato.
This is one of those times.
And you wonder why December is always so hard to trade!
Only stop losses like this can keep you in business in this kind of market.
Better to take the hit here and live to fight another day. We?ll make this money back in a week or two.
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 Bull Call Spread? .
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.
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.
Paid subscribers, 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.
Here Are the Specific Trades You Need to Execute This Position:
Sell 41? (VXX) December, 2016 $24 calls at????..?$2.35
Buy to cover short 41? (VXX) December, 2016 $27 calls at...$0.75
Net Cost:???????????????????........$1.60
Loss: $2.37 - $1.60 = -$0.77
(41 X 100 X -$0.77) = -$3,157 or -32.49%
