Trade Alert – (SPY) April 4, 2013

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 – (SPY)

Buy the SPDR S&P 500 (SPY) April, 2013 $158-$161 Put spread at $2.59 or best

Opening Trade

4-4-2013

expiration date: 4-19-2013

Portfolio weighting: 10%

Number of Contracts = 39 contracts

I am doubling up my short position here as the market continues to lose momentum. I can earn a higher profit in the same position today, even though the index is unchanged, because of the big pop in volatility.

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 39 April, 2013 (SPY) $161 puts at……………$5.81
Sell Short 39 April, 2013 (SPY) $158 puts at.…….$3.22
Net Cost:………………………………………..…….$2.59

Profit: $3.00 – $2.59 = $0.41

($0.41 X 100 X 39) = $1,599 =1.60% for the notional $100,000 model portfolio.

SPY 4-4-13

VIX 4-4-13