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.
Buy the Russell 2000 iShares (IWM) February, 2015 $113-$118 deep in-the-money vertical call spread at $3.97 or best
expiration date: February 20, 2015
Portfolio weighting: 10%,
Number of Contracts: 25
If you don’t like how the call spread sets up, your can buy the Russell 2000 (IWM)? outright, or the ProShares Ultra Russell 200 2X leveraged ETF (UWM). Please? click here at http://www.proshares.com/
Another more aggressive alternative is to buy only the March, 2015 (IWM) $125? calls at $2.55 with no short side hedge for a potential double.
There is no doubt that a major, multi year upside breakout is taking place in US small cap stocks. Check out the chart below for the iShares Core S&P Small Cap ETF (IJR).
Small cap stocks are the bigger beneficiaries of cheap oil. Therefore, I expect the (IWM) to lead the market in early 2015, handily outperforming the big cap S&P 500, which is being dragged down by the energy sector.
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:
Buy 25 February, 2015 (IWM) $113 calls at……………$9.20
Sell short 25 February, 2015 (IWM) $118 calls at………$5.23
Potential Profit: $5.00 – $3.97 = $1.03
(25 X 100 X $1.03) = $2,575 or 2.58% profit for the notional $100,000 portfolio.