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) April, 2013 $106-$111 in-the-money bear put spread at $4.55 or best
expiration date: April 19, 2013
Portfolio weighting: 10%
Wow, that was quick! An overnight collapse in the yen of ¥1.5 in the cash market that started minutes after I put out my last Trade Alert to sell more of the beleaguered Japanese currency. The instant profit we have in this trade, plus the cash we just freed up coming out of the March yen options positions, allows me to do a quick double up here and sell into a cascading collapse.
My $103 downside target for the (FXY) held up like a hot knife through butter. The market is now targeting ¥100 in the cash and over $100 in the (FXY). The short yen ETF (YCS) blasted all the way up to $62. Sure, we have already moved a lot, but you have to strike when the iron is hot.
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:
Buy 22 April, 2013 (FXY) $111 puts at……………$8.80
Sell short 22 April, 2013 (FXY) $106 puts at..…….$4.25
Profit at expiration: $5.00 - $4.55 = $0.45
(22 X 100 X $0.45) = $990 or 0.99% profit for the notional $100,000 portfolio.