Trade Alert - (TLT) November 15, 2016
When a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what security to buy, 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.
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Trade Alert - (TLT)- Buy
Buy the iShares 20+ Year Treasury Bond ETF (TLT) December, 2016 $127-$130 in-the-money vertical bear put spread at $2.65 or best
Opening Trade
11-15-2016
Expiration Date: December 16, 2016
Portfolio Weighting: Increase from 10% to 20%
Number of Contracts = 38 contracts
I am going to use this two-point rally off the bottom in the (TLT) to DOUBLE UP my short position in the Treasury bond market.
Don?t pay more than $2.70 for this spread or you?ll be guilty of chasing.
If you can?t trade options, buy the ProShares UltraShort 20+ Treasury (TBT) for the medium term view. Potentially it could double over the next four years.
This is a bet that the iShares 20+ Year Treasury Bond ETF (TLT) will not close above $127 by the December 16th expiration in 23 trading days.
That works out to a yield on the 10-year Treasury bond of 2.00%, versus the current 2.22%.
I?m sorry, but I just don?t see a 25 basis point dip in yields going into three interest rates hikes by the Federal Reserve that start in December, and a possible tripling in bond yields over the next four years.
One outcome of the presidential election is that I expect yields on the ten-year Treasury to rise to as high as 6.0% within four years, taking the (TLT) down $50 to as low as $70.
Low risk, high return, I love it!
Open your online trading platform please.
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 about how to execute this options spread, please watch my training video ?How to Execute a Vertical Bear Put Spread?
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.
Please keep in mind these are ballpark prices at best. After the text alerts go out, prices can be all over the map. There is no telling how much the market will have moved by the time you get this email.
Paid subscribers, be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage.? In today's volatile markets, individual investors need every advantage they can get.
Here Are the Specific Trades You Need to Execute This Position:
Buy 38 December, 2016 (TLT) $130 puts at????.???$8.00
Sell short 38 December, 2016 (TLT) $127 puts at..????.$5.35
Net Cost:????????????????..??.?.....$2.65
Potential Profit: $3.00 - $2.65 = $0.35
(38 X 100 X $0.35) = $1,330 or 13.21% in 23 trading days.?
