Trade Alert – (SPY) Sep. 4, 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 Your Short position in the S&P 500 SPDR (SPY) September, 2012 $147-$153 Call Spread at $0.07 or best

Closing Trade


expiration date: 9-21-2012

Portfolio weighting: 5%

($5,000/100/$0.07) = 30 Contracts

As we have squeezed 80% of the profit out of this position, it no longer a productive use of margin. The risk/reward for holding on is also no longer favorable. I therefore want to take profits on my short position in S&P 500 SPDR (SPY) September, 2012 $147-$153 Call Spread at $0.07 or best.

Given all of the potentially cataclysmic events in the coming weeks, it is not worth hanging on here for a lousy $210, or 21 basis points. There are bigger fish to fry, and I’ll let you know where one is with another alert in a few minutes, as soon as I finish my massage.

These are the trades you should execute:

Buy the September, 2012 (SPY) $147 calls at…………$0.09
Sell the September, 2012 (SPY) $153 calls at………….$0.02
Net Premium Cost:……………………………………...$0.07

The profit on this trade is $0.34 - $0.07 = $0.27

Net Profit: (30 X 100 X $0.27) = $810, or 0.81% profit for the notional $100,000 portfolio for a less than one month position.

I am happy to report that this is the 15th consecutive closing position for my Trade Alert Service.