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)
Buy the United Continental Holdings (UAL) April, 2013 $34-$36 put spread at $1.76 or best
expiration date: 4-19-2013
Portfolio weighting: 5%
Number of Contracts = 29 contracts
The transports have lost some upside momentum here, and the markets generally as well, so I am going to take some extra income here. I am buying the United Continental Holdings (UAL) April, 2013 $34-$36 put spread at $1.76 or best.
This creates a “straddle” on (UAL), with the end result of lowering the breakeven point of our existing (UAL) call spread.
Specifically, the $684 you can take in on this put spread reducing our breakeven point on the call spread from $29.74 to $29.55.
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 29 April, 2013 (UAL) $36 puts at……………$4.15
Sell Short 29 April, 2013 (UAL) $34 puts at.…….$2.39
Profit: $2.00 - $1.76 = $0.24
($0.24 X 100 X 29) = $684 – 0.68% for the notional $100,000 model portfolio.