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)
Buy the Currency Shares Japanese Yen Trust (FXY) February, 2013 $112-$117 in-the-money bear put spread at $4.20 or best
Opening Trade-this represents a doubling up of our risk on top of the (FXY) $113-$118 put spread we put on yesterday
expiration date: February 15, 2013
Portfolio weighting for this spread: 10% = 22 contracts
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 buy the legs individually or you will end up losing much of your profit up front. If you don’t get filled, then just wait for the next Trade Alert. There will be many fish in the sea.
The same applies if, for any reason, you don’t understand this trade. Better to watch this strategy unfold on paper in the model portfolio before you try it with real money.
Keep in mind that these are ball park prices only. Spread pricing can be very volatile on expiration months farther out.
These are the trades you should execute:
Buy 22 February 2013 (FXY) $117 puts at………………$6.90
Sell short 22 February 2013 (FXY) $112 puts at..……….$2.70
Maximum potential profit at expiration: $5.00 - $4.20 = $0.80
(22 X 100 X $0.80) = $1,760 or 1.76% profit for the notional $100,000 portfolio.