Trade Alert – (SPY) January 2, 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) February, 2013 $135-$140 call spread at $4.31 or best

Opening Trade

1-2-2013

expiration date: 2-15-2013

Portfolio weighting: 30%

Number of Contracts = ($30,000/100/$4.31) = 70 contracts

Time to cash in on the fiscal cliff resolution with little risk. A ton of new money is about to hit the market. China is turning around. Tax loss selling has turned into tax loss rebuying. The US economy is undergoing a growth spurt which the data releases have yet to reflect. Everyone is underinvested, the market is rocketing, and volatility is crashing. The “RISK ON” move is evident across all asset classes.

This position bets that the (SPY) 200 day moving average at 1,390 holds for 6 weeks. The next crisis deadline for the debt ceiling is not until March 1.

From John Thomas,
freezing in Chicago

Buy 70 February, 2013 (SPY) $135 calls at……………$10.66
Sell Short 70 February, 2013 (SPY) $140 calls at …….$6.35
Net Cost:……………………………….………………….$4.31

Maximum potential profit at expiration:
$5.00 – $4.31 = $0.69

($0.69 X 100 X 70) = $4,830 – 4.83% for the notional $100,000 model portfolio.