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) April, 2013 $145-$150 call spread at $4.57 or best
expiration date: 4-19-2012
Portfolio weighting: 10%
Number of Contracts = 22 contracts
That February nonfarm payroll number is killer, up 236,000, taking the unemployment rate down to 7.7%, a four year low. It is clear that Ben Bernanke’s evil plan to lower the jobless rate is working.
If this is not a gun pointed at your head ordering you to buy more stocks, I don’t know what is. I am therefore not waiting for the March options expiration to get back into to market, and am committing my last 10% of free capital through buying the SPDR S&P 500 (SPY) April, 2013 $145-$150 bull call spread.
It looks like a run by the (SPY) to a new all time high is now a chip shot. As for all the reasons why, read my upcoming Monday letter, which I will be working on all day today.
How about that for a teaser?
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 22 April, 2013 (SPY) $145 calls at……………$10.07
Sell Short 22 April, 2013 (SPY) $150 calls at.…….$5.50
Profit: $5.00 - $4.57 = $0.43
($0.43 X 100 X 22) = $946 – 0.95% for the notional $100,000 model portfolio.