Trade Alert - (SPY) April 23, 2025 - BUY

When John identifies a strategic exit point, he will send you an alert with specific trade information on what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.

 

Trade Alert - (SPY) - BUY

Buy the S&P 500 (SPY) May 2025 $570-$580 in-the-money vertical bear put debit spread at $8.60 or best

 

Opening Trade

4-23-2025

expiration date: May 16, 2025

Portfolio weighting: 10% weighting

Number of Contracts = 12 contracts

I have been covering trade negotiations for over 50 years, and this is the worst-handled one by the US I have ever seen. I am always on America’s side, so it makes me cringe.

America has squandered its huge advantages and put China in the driver's seat by letting the stock market do its negotiating for it. Whenever Trump makes an offensive comment about China or the Federal Reserve, markets crash. The administration then has to reverse those comments to talk the market back up.

Needless to say, this is a trader's dread come true. I loaded the boat with a 50% long position during the last meltdown. Now I am using a 2,000-point rally to flip to the short side. I believe that eventually the trade war will get settled, leading to new highs in the stock market. But that’s not going to happen in the next 17 trading days.

The (SPY) just so happens to have massive upside resistance at the 200-day moving average at $570.13, which is why I picked these strike prices. At a certain point, more talking just generates another today wave of selling.

Therefore, I am buying the S&P 500 (SPY) May 2025 $570-$580 in-the-money vertical bear put debit spread at $8.60 or best

DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.

Do not pay more than $9.20, or you will be chasing.

Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and lower your offer by 10 cents with a second order.

If you live in a foreign time zone when the US stock market is closed, such as Australia, or don’t want to sit in front of a screen all day, simply enter a spread of Good-Until-Cancelled orders overnight, like $8.60, $8.70, $8.80, and $8.90. You should get done on some or all of these.

This is a bet that S&P 500 (SPY) will not trade above $570 in 17 trading days.

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

Buy 12 May 2025 (SPY) $580 puts at…………………...…$42.00

Sell short 12 May 2025 (SPY) $570 puts at……………….$33.40

Net cost:………………………….……………………..................$8.60

Potential Profit: $10.00 - $8.60 = $1.40

(12 X 100 X $1.40) = $1,680 or 16.28% in 17 trading days

 

 

 

 

If you are uncertain about how to execute an options spread, please watch my training video by clicking here.

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.

Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.