Trade Alert – (UAL) April 4, 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. 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 – (UAL)

Sell the United Continental Holdings (UAL) April, 2013 $34-$36 put spread at $2.00 or best

Closing Trade

4-4-2013

expiration date: 4-19-2013

Portfolio weighting: 5%

Number of Contracts = 29 contracts

There’s nothing left in this baby. It closed at the expiration value last night, so you should be able to get close to that. There’s no point in carry the position for two more weeks to make nothing. Better to free up the capital to use for the new opportunities presenting themselves. I should have done double the size and balanced out the long side call spread. That would have allowed us to get out at cost. Last week’s insanely risky move looks like this week’s prescient insight. Live and learn.

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:

Sell 29 April, 2013 (UAL) $36 puts at……………$7.02
Buy to Cover Short 29 April, 2013 (UAL) $34 puts at.…….$5.02
Net Proceeds:………………………………..……..…….$2.00

Profit: $2.00 – $1.76 = $0.24

($0.24 X 100 X 29) = $696 – 0.70% for the notional $100,000 model portfolio.

UAL 4-4-13

United Airplain The Put Spread Cut the Call Spread losses by Half