When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.
Trade Alert – (FB) – BUY
BUY the Facebook (FB) July, 2017 $160-$162.50 in-the-money vertical bear put spread at $2.22 or best
expiration date: July 21, 2017
Portfolio weighting: 10%
Number of Contracts = 44 contracts
I don’t believe that Facebook (FB) will blast through to a new all time high in July.
More than likely it will continue to grind sideways during the summer doldrums.
I am therefore buying the Facebook (FB) July, 2017 $160-$162.50 in-the-money vertical bear put spread at $2.22 or best.
By adding this position I am straddling up my existing Facebook (FB) July, 2017 $145-$148 in-the-money vertical bull call spread.
This will enable me to maximize my profits in a go-nowhere, low volatility market. With the Volatility Index (VIX) hugging the $10 level that sounds like a safe bet.
It also gives us some downside protection if for any reason the market decides to sell off.
Don’t pay a penny more than $2.35 for the position.
If you can’t do options stand aside. This is an options expiration play only.
This is a bet that Facebook (FB) will not trade above $160 by the July 21 expiration in 15 trading days.
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video on How to Execute a Vertical Bear Put Spread by clicking here at http://members.madhedgefundtrader.com/ltt-executetradealerts/.
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Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
Be sure you’ve signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In today’s market, investors need every advantage they can get.
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 with only 13 days to expiration.
If you don’t get done, don’t worry. There are another 250 Trade Alerts coming at you over the coming 12 months.
Here are the specific trades you need to execute this position:
Buy 44 July, 2017 (FB) $162.50 puts at……………………$11.60
Sell short 44 July, 2017 (FB) $160 puts at………………….$9.38
Potential Profit: $2.50 – $2.22 = $0.28
(44 X 100 X $0.28) = $1,232 or 12.61% profit in 15 trading days.