Trade Alert - (SPY) October 22, 2014
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 - (SPY)
Buy the S&P 500 (SPY) November, 2014 $179-$183 in-the-money vertical bull call spread at $3.55 or best
Opening Trade
10-22-2014
expiration date: November 21, 2014
Portfolio weighting: 10%
Number of Contracts = 32 contracts
A one man terrorist attack in Canada is no reason to take the stock market to new lows. A pop in Volatility Index back up to $18.2 is a reason to buy the S&P 500 (SPY) November, 2014 $179-$183 in-the-money vertical bull call spread.
Rich volatility premiums like this are to be sold. If you have any questions on how to execute this trade, go to my Vertical Bull Call Spread Training video at http://www.madhedgefundtrader.com/ltt-executetradealerts/ .
You can buy this spread anywhere in a $3.40-$3.70 range and have a reasonable expectation of making good money on this trade.
If you can?t do options take a small position in (SPY) at market price.
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 32 November, 2014 (SPY) $179 calls at?????$15.00
Sell short 32 November, 2014 (SPY) $183 calls at..??.$11.45
Net Cost:??????????????????.....$3.55
Potential Profit at expiration: $4.00 - $3.55 = $0.45
(32 X 100 X $0.45) = $1,445 or 1.45% profit for the notional $100,000 portfolio.
