Trade Alert - (FXE) August, 5, 2014
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 - (FXE)
Sell the Currency Shares Euro Trust (FXE) August, 2014 $134-$136 in-the-money bear put spread at $1.99 or best
Closing Trade
8-5-2014
expiration date: August 15, 2014
Portfolio weighting: 10%
Number of Contracts = 58 contracts
No money left in this baby. It?s time to build some cash and wait for the next Euro rally to sell into at better prices.
That makes two short Euro trades in a row adding 2.50% to your performance just in the past three weeks. Nice!
I still hate the beleaguered European currency, and love the fact that my summer vacation is getting cheaper by the day. The long-term target is still $1.27 or below, so this could be the gift that keeps on giving.
ECB president, Mario Draghi has a winning hand here, so he is going to keep on doubling down.
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 58 August, 2014 (FXE) $136 puts at?????$4.00
Buy to cover short 58 August, 2014 (FXE) $134 puts at..??.$2.01
Net Cost:??????????????????.....$1.99
Potential Profit: $1.99 - $1.82 = $0.17
(58 X 100 X $0.17) = $986.00 or 0.99% profit for the notional $100,000 portfolio.
