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.
Buy the Bank of America (BAC) February, 2015 $16-$17 in-the-money vertical call spread at $0.88 or best
expiration date: February 20, 2015
Portfolio weighting: 10%
Number of Contracts: 114
The $16 and $17 strikes also make this a nice set up in the options. I expect? markets to rally in the New Year, for financials to take the lead, and (BAC) should? drift up with it. If the ten-year Treasury market (TLT) holds at a 2.10% yield and? moves up to a new, higher range, it will be a sure thing.
Keep in mind that the options market is highly illiquid now, so don’t hold me to? these prices. They are ballpark estimates, at best.
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.
If the price of this spread has moved more than 5% by the time you receive this Trade Alert, don’t chase it. Wait for the next one. There are plenty of fish in the sea.
Here are the specific trades you need to execute this position:
Buy 114 February, 2015 (BAC) $16 calls at……………$2.20
Sell short 114 February, 2015 (BAC) $17 calls at………$1.32
Potential Profit: $1.00 – $0.88 = $0.12
(114 X 100 X $0.12) = $1,368 or 1.37% profit for the notional $100,000 portfolio.