Trade Alert – (USO) December 5, 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. 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 – (USO)

Sell the United States Oil Fund (USO) January, 2013 $29-$32 bear put spread at $0.84 or best

Closing Trade

12-5-2012

expiration date: 1-15-2013

Portfolio weighting: 5%

($5,000/100/$0.84) = 54 Contracts

I am using this “RISK OFF” day to pare back my short positions. Oil is down the most, so that is the natural one to cut. I also want to duck the time decay on the United States Oil Fund (USO) January, 2013 $29-$32 bear put spread that really kicks in the closer we get to the holidays.

Keep in mind that these are ballpark prices at best. The best execution can be had by placing your bid in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these spread trades can be enormous. Don’t buy the legs individually or you will end up losing much of your profit up front. If you don’t get filled, then just wait for the next Trade Alert. The will be many fish in the sea. To execute this trade:

Sell 54 January, 2013 (USO) $32 puts at………………….$1.12
Buy to cover short 54 January, 2013 (USO) $29 puts at…$0.28
Net Premium:………………………………..………..……$0.84

Loss: $0.93 – $0.84 = $0.09

($0.09 X 100 X 54) = $486, or 0.49% for the notional $100,000 model portfolio.

Comments are closed.