Trade Alert - (VXX) September 26, 2016

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 - (VXX)- TAKE PROFITS

SELL the iPath S&P 500 VIX Short-Term Futures ETN (VXX) October, 2016 $27-$30 in-the-money vertical bull call spread at $2.85 or best

Closing Trade

9-26-2016

Expiration Date: October 21, 2016

Portfolio Weighting: 10%

Number of Contracts = 40 contracts

With the 17% spike in the Volatility Index (VIX) this morning, I?m taking profits in my position in the iPath S&P 500 VIX Short Term Futures ETN (VXX) October, 2016 $27-$30 in-the-money vertical bull call spread.

At a price of $2.85 I get to keep 68.7% of the maximum potential profit in this position, and I don?t have to hold it for an additional 19 trading days to capture the rest.

It also allows me to derisk ahead of tonight?s presidential debate which could trigger a big move up OR down in the markets tomorrow.

When the markets offer you a gift, TAKE IT! A 13.09% profit in a mere two trading days is nothing to sneeze at.

This was a bet that the iPath S&P 500 VIX Short Term Futures ETN (VXX) wouldn?t trade below the $30 level by the October 21 expiration date, in 21 trading days.

As of this moment, it is trading at $35.40.

To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of optionshouse.

If you are uncertain on how to execute an options spread, please watch my training video on ?How to Execute a Bull Call Spread? by clicking https://www.madhedgefundtrader.com/ltt-executetradealerts/. You must be logged into your account to view the video.

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. Spread pricing can be very volatile on expiration months farther out.

Here are the specific trades you need to execute this position:

Sell 40 October, 2016 (VXX) $27 calls at????.?.??$8.60

Buy to cover short 40 October, 2016 (VXX) $30 calls at.?..$5.75
Net Cost:???????????????????........$2.85

Profit: $2.85 - $2.52 = $0.33

(40 X 100 X $0.33) = $1,320 or 13.09% in 2 trading days

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.