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 – (FXY)
Sell the Currency Shares Japanese Yen Trust (FXY) April, 2013 $106-$110 in-the-money bear put spread at $3.95 or best
expiration date: April 19, 2013
Portfolio weighting: 10%
I am going to take profits on the last of my short yen positions. This is has been one of the largest one-day moves on foreign exchange history, and I was on the right side of it with a maximum 30% position. I can do a lot more damage with the extra cash going into the April expiration in two weeks.
These are the middle market marks at the moment, so you should get close to this. I will go into depth on this in a few minutes. I like the idea of going into the nonfarm payroll tomorrow with a 35% cash position.
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 28 April, 2013 (FXY) $110 puts at……………$8.20
Buy to cover short 28 April, 2013 (FXY) $106 puts at..…….$4.25
Profit: $3.95 – $3.57 = $0.38
(28 X 100 X $0.38) = $1,064 or 1.06% profit for the notional $100,000 portfolio.