Trade Alert - (FXE) April 29, 2015
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.
Trade Alert - (FXE) ? TAKE PROFITS
Sell the Currency Shares Euro Trust (FXE) May, 2015 $99-$102 in-the-money bull call spread at $2.98 or best
Closing Trade ? NOT FOR NEW SUBSCRIBERS
4-29-2015
expiration date: May 15, 2015
Portfolio weighting: 10%
Number of Contracts = 39 contracts
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I see the Currency Shares Euro Trust (FXE) May, 2015 $99-$102 in-the-money bull call spread trading at $3.00 on my screen this morning, so I am going to assume that you can get done at $2.98.
Yes, you all thought I was smoking something when I told you to buy the Euro two weeks ago.
However, if you threw caution to the wind and joined me in buying the Currency Shares Euro Trust (FXE) May, 2015 $99-$102 in-the-money bull call spread at $2.55, you have earned a tidy 17% profit.
By performing this agile move, you captured a full four-cent rally by the Euro against the greenback. My assumption that it could take many months for the beleaguered continental currency to pierce parity proved correct. There are just too many short positions out there in this consensus trade.
At today?s mark at $2.98, the spread has captured some 96% of its potential profit. The risk/reward for continuing to hold it is no longer in your favor. So, I am taking profits right here.
Besides, I am going to spend next week covering the SALT conference at the Bellagio Hotel in Las Vegas next week. I don?t want someone pulling me away from the blackjack table, oops! I mean an important business meeting, just because my portfolio is blowing up.
In the foreign exchange markets volatility can be extreme, and winners have a nasty habit of turning into losers overnight.
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:
SELL 39 May, 2015 (FXE) $99 calls at?????$11.00
Buy to cover short 39 May, 2015 (FXE) $102 calls at..??.$8.02
Net Proceeds:????????????????.....$2.98
Profit: $2.98 - $2.55 = $0.43
(39 X 100 X $0.43) = $1,677 or 1.68% profit for the notional $100,000 portfolio.
