Trade Alert – (BA) May 21, 2012

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 – (BA)

Sell the Boeing (BA) August, 2012 $70 Puts at $2.95 or best

Closing Trade


expiration date: 8-17-2012

Portfolio weighting: 5% = 14 Contracts

I expect a fairly energetic bounce off the 200 day moving average in the S&P 500, which we hit last night in Asian trade, triggering a wave of profit taking for all “RISK OFF” positions. We have covered a lot of real estate on the downside in a very short time.

You have to give the permabulls one more chance to run this thing up. The markets are now nearly the most oversold in history. Asymmetric risks are now to the upside. That means that the next marginal piece of bad news can only push stocks down a little, but the next piece of good news will drive it up a lot.

The loss on this trade amounts to ($3.45 - $2.95 = $0.50). This subtracted (100 X 14 X $0.50) = $700, or 0.70% to the value of your notional $100,000 model portfolio. Serves me right trying to be too smart by half and attempting to make money on the short side from one of the world’s best companies. Better to ride a Boeing as a pilot or passenger than to short it.