Follow Up to Trade Alert - (SPY) June 23, 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. This is your chance to ?look over? John Thomas? shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen.
Further Update to: Trade Alert -(SPY)
Buy the S&P 500 (SPY) July, 2014 $199-$202 bear put spread at $2.64 or best
Opening Trade
6-23-2014
expiration date: July 18, 2014
Portfolio weighting: 10%
Number of Contracts = 38 contracts
I?m getting a lot of feedback from my many Trade Alert followers that many brokers have refused to make markets in the July $202 puts for the (SPY). If they are, they are placing size limits as low as 200 contracts.
To see these cease to trading so close to the money with three plus weeks to expiration is unheard of. But then, what else is new.
I know OptionMONSTER is still trading the $202 strike, because that is where I got my price.
It is yet another sign that brokers are afraid that they won?t be able to lay off the risk in this horrendously low volume and illiquid summer market, and therefore lose money. We are trying to sell short volatility to them, and they don?t want to own it, even though we are at historic lows.
So get whatever you can get done with the (SPY) on the short side at similar strikes. Or just walk away from the trade, as they are begging you to do.
You can always get some downside production in other form by taking positions in the 1X (SH) S&P 500 bear ETF, or the bear 2X (SDS).
It is all another reason to take a long vacation.
Time to put on some modest downside protections to hedge out 30% long exposure in equities.
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 38 X July, 2014 (SPY) $202 puts at???????$6.33
Sell short 38 X July, 2014 (SPY) $199 puts at?????$3.69
Net Cost:??????????????????.....$2.64
Potential Profit = (38 X 100 X $0.34) = $1,294, or 1.29% for the notional $100,000 portfolio.
