Trade Alert – (SPY) August 16, 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 – (SPY)

Buy to cover the short position in the S&P 500 SPDR (SPY) October, 2012 $132 Puts at $1.20 or best

Closing Trade


expiration date: 10-19-2012

Portfolio weighting: 5%

($5,000/100/$1.20) = 11 Contracts

I think the market is getting very over extended here and long overdue for a substantial pullback. So I am going to take profits on my short position in the S&P 500 SPDR (SPY) October, 2012 $132 puts at $1.20 or best.

This converts my October, 2012 (SPY) $138-$132 put spread into an outright $138 put only, thus giving me more desired downside exposure in risk assets. I may reestablish the short leg of the spread on a 3 to 5 points sell off in the (SPY).

The profit on this trade is $1.60 – $1.20 = $0.40. That works out to: (11 X 100 X $0.40) = $440, or 0.44% profit for the notional $100,000 portfolio.

I am proud to point out that this is the 11th consecutive profitable closing position for the Trade Alert Service. Every closed trade for the last three months has been profitable.