Trade Alert – (IWM) November 1, 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 – (IWM)

Buy the iShares Russell 2000 Index ETF (IWM) January, 2013 $76-$80 in-the-money call spread at $3.00 or best

Opening Trade

11-1-2012

expiration date: 1-18-2013

Portfolio weighting: 10%

Number of Contracts = ($10,000/100/$3.00) = 33 contracts

I think we are setting up for a nice post-election rally that could well last until the end of 2012, so I am going to start scaling into “RISK ON” positions today.

For a major, in depth explanation of why I believe “RISK ON” is he way to go here, please read my My 2012-2013 Stock Market Forecast, which should be in your inbox now, provided that you have electricity.

Buy 33 January, 2013 (IWM) $76 Calls at……………$6.89
Sell Short 33 January, 2013 (IWM) $80 Calls at…….$3.89
Net Cost:……………………………….………………….$3.00

Maximum potential profit at expiration:
$4.00 – $3.00 = $1.00

($1.00 X 100 X 33) = $3,300 – 3.30% for the notional $100,000 model portfolio.

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