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 - (SPY)
Buy the SPDR S&P 500 (SPY) March, 2013 $142-$147 call spread at $4.30 or best
expiration date: 3-15-2012
Portfolio weighting: 10%
Number of Contracts = ($10,000/100/$4.20) = 24 contracts
This market just isn’t giving us a dip. Time to chance once again.
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. If you don’t get filled, then just wait for the next Trade Alert. There will be many fish in the sea.
The same applies if, for any reason, you don’t understand this trade. Better to watch this strategy unfold on paper in the model portfolio before you try it with real money.
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 24 March, 2013 (SPY) $142 calls at……………$8.87
Sell Short 24 March, 2013 (SPY) $147 calls at …….$4.57
Maximum potential profit at expiration:
$5.00 - $4.30 = $0.70
($0.70 X 100 X 24) = $1,680 – 1.68% for the notional $100,000 model portfolio.