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 – (BAC)
Buy the Bank of America (BAC) November, 2014 $15-$16 in-the-money vertical bull call spread at $0.83 or best
expiration date: November 21, 2014
Portfolio weighting: 10%
Number of Contracts = 120 contracts
You can buy this spread anywhere in a $0.80-0.90 range and have a reasonable expectation of making good money on this trade.
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 120 November, 2014 (BAC) $15 calls at?????$1.95
Sell short 120 November, 2014 (BAC) $16 calls at..??.$1.12
Potential Profit at expiration: $1.00 – $0.83 = $0.17
(120 X 100 X $0.17) = $2,040 or 2.04% profit for the notional $100,000 portfolio.