Trade Alert – (GOOG) October 22, 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. 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 – (GOOG)

Stop Loss-Sell the (GOOG) December, 2012 $650-$680 Call Spread at $18.00 or best

Closing Trade

10-22-2013

expiration date: 12-21-2012

Portfolio weighting: 10%

($30,000/100/$18.00) = 4 Contracts

Keep in mind that these are only ball park prices, as the spreads can be highly volatile. Here are the specific trades you need to execute this profitable position:

Sell 4 X (GOOG) December, 2012 $650 Calls at……………….…. $41.65
Buy to cover short 4 X (GOOG) December, 2012 $680 calls a…….-$23.65

Net Cost………………………………………………………….…. $18.00

Loss = $25.00 – $18.00 = $7.00

($7.00 X 100 X 4) = $2,800, or 2.80% for the notional $100,000 model portfolio.

I will look to reestablish lower down.

Clearly the market is only looking at the glass half empty these days. Sure, revenue for this gigantic corporation are up 45% YOY. But cost per click has gone down, thanks to mobile. The accidental early release of the report during market hours magnified the impact, creating a flash crash.

Blame, the election, blame the fiscal cliff, blame the dog who ate my homework. For whatever, reason, traders want out. Stocks that disappoint are going down four times more than the ones that beat go up by a margin of four to one. This is a warning to head to the sidelines. Besides, breaking our upper strikes on the $650-$680 spread is an automatic reason to stop out.

Any loss that you don’t learn from is a loss wasted. Great hedge fund managers are defined by how they manage their losers and not their winners.

On to the next trade.