• support@madhedgefundtrader.com
  • Member Login
Mad Hedge Fund Trader
  • Home
  • About
  • Store
  • Luncheons
  • Testimonials
  • Contact Us
  • Click to open the search input field Click to open the search input field Search
  • Menu Menu

Trade Alert - (BAC) Update - February 15, 2012

Diary, Trade Alert

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

Buy the Bank of America (BAC) May, 2012 $7 puts at $0.40 cents or best

Opening Trade

2-15-2012

expiration date: 5-18-2012

Portfolio weighting: 5% when in the money

($5,000/100/$0.40) = 125 Contracts

There is a method to my madness.

It?s all about Apple (AAPL). A disproportionate share of the market volume has been pouring into Apple shares for the past two weeks. The higher it went, the more people wanted to buy. The action in the call options has been absolutely explosive.

The focus of the market distilled down to not just a single sector, but a single stock. When it rolls over, the rest of the market will follow it down. Apple has pulled this off while virtually every other asset class is showing their own topping formations, including most other stocks, the euro, the yen, copper, gold, silver, and even the ags.

The sharp $15 sell off we saw unfold in Apple stock in just a few minutes suggests the short term top is in for the sizzling, innovative company. So am I going to sell short Apple stock? Heavens no! I love Steve Jobs? creation. I still think it will hit my long term target of $1,000 sooner than later. In fact, I just bought a new solid state MacBook Pro with all the specs maxed out and I am picking up my IPhone 4s on Friday.

Instead, I am going to use Apple as the signal for my cross market timing, and then short a stock I hate, Bank of America (BAC). This is one of the top performing stocks of 2012, soaring some 50%, in six weeks. It is beating Apple by an almost 2:1 ratio, which has jumped only 28%. How insane is that?

When I am in a selling mood, I want to sell the most expensive stock in the market that has had the most blistering recent gains. That describes (BAC) to a tee, which is nowhere near solving its structural problems and still has a declining real estate market to deal with. I picked the May $7 puts to give us plenty of time for the downside to develop. Make it to $7, and the $7 puts double in value. Make it to $6, and they triple.

And while I?m at it, I am going to double up on my position in the leveraged short S&P 500 ETF (SDS) while it is trading at $16.69.

Check Out Bank Of America?s New Logo

Share this entry
  • Share on Facebook
  • Share on X
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share by Mail
0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2012-02-15 16:02:322012-02-15 16:02:32Trade Alert - (BAC) Update - February 15, 2012

tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Mad Hedge Fund Trader (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade. 

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

Copyright © 2025. Mad Hedge Fund Trader. All Rights Reserved. support@madhedgefundtrader.com
  • Privacy Policy
  • Disclaimer
  • FAQ
Link to: Join Me on the Queen Mary 2 for My Seminar at Sea - July 11, 2012 Link to: Join Me on the Queen Mary 2 for My Seminar at Sea - July 11, 2012 Join Me on the Queen Mary 2 for My Seminar at Sea - July 11, 2012 Link to: February 16, 2012 - Quote of the Day Link to: February 16, 2012 - Quote of the Day February 16, 2012 - Quote of the Day
Scroll to top