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.
Trade Alert - (XLF)
Sell the Financials Select Sector SPDR (XLF) January, 2014 $19-$21 call spread at $1.98 or best
Closing Trade
1-10-2014
expiration date: January 17, 2014
Portfolio weighting: 10%
Number of contracts =58 contracts
My bet that the financials would substantially outperform the market has paid off handsomely. These is nothing left in this trade so it is time to free up some cash. I?ll go back into the financials either on the next substantial dip or a prolonged sideways move.
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.
Keep in mind that these are ballpark prices only. Spread pricing can be very volatile on expiration months farther out.
Here are the specific trades you need to execute this position:
Sell 58 January, 2013 (XLF) $19 calls at?????$2.97
Buy to cover short 58 January, 2013 (XLF) $21 calls at..??.$0.99
Net Cost:?????????????????.....$1.98
Profit: $1.98 - $1.73 = $0.25
(58 X 100 X $0.25) = $1,450 or 1.45% profit for the notional $100,000 portfolio.
