Trade Alert - (FXY) May 18, 2016
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.
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Trade Alert - (FXY)-Buy
Buy the Currency Shares Japanese Yen Trust (FXY) June, 2016 $91-$94 in-the-money vertical bear put spread at $2.65 or best
Opening Trade
5-18-2016
expiration date: June 17, 2016
Portfolio weighting: 10%
Number of Contracts = 38 contracts
You can pay up to $2.75 for this spread and it still makes sense, but no more.
This time, it was Japan?s Vice Minister of Finance that threatened imminent intervention to weaken the Japanese yen.
Rumors of a June Fed interest rate hike are pouring fuel on the fire.
Keep up that drumbeat, and the (FXY) will be trading in the mid $80?s in no time.
The Currency Shares Japanese Yen Trust (FXY) May, 2016 $91-$94 in-the-money vertical bear put spread is a bet that the (FXY) will trade at or below $91 by the June 17 expiration.
If that comes to pass, you will make a 13.20% profit in the next 23 trading days.
We have made money on this baby for the past three consecutive months.
If this is your first trade with the Mad Hedge Fund Trader, you may want to pass. (FXY) options are notoriously illiquid during US trading hours. You have to just put your limit order in the market and wait. If you get your price, fine. If not, walk away. Chasing is NOT allowed here.
If you can?t trade options, then buy the ProShares Ultra Short Yen ETF (YCS) outright keep it. The yen is going much lower.
The best execution for the options 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.
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of optionshouse.
If you are uncertain on how to execute an options trade, please watch my training video on ?How to Execute a Vertical Bear Put Debit Spread? by clicking here at https://www.madhedgefundtrader.com/ltt-executetradealerts/. You must be logged into your account to view the video.
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, and the liquidity in the options market isn?t that great these days. If you can?t get done at the $2.60 price, then keep raising you bid in 5-cent increments until you succeed. If that doesn?t work, then just walk away.
More depth on the Japanese yen to follow.
Here are the specific trades you need to execute this position:
Buy 38 June, 2016 (FXY) $94 puts at?????..??$6.75
Sell short 38 June, 2016 (FXY) $91 puts at..????..$4.10
Cost:????????????.???????.....$2.65
Profit: $3.00 - $2.65 = -$0.35
(38 X 100 X $0.35) = $1,330 or 13.20% profit in 23 trading days.
