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 - (SPY) - BUY
Buy the S&P 500 (SPY) September 2022 $445-$455 in-the-money vertical bear put spread at $9.00 or best
Opening Trade
8-11-2022
expiration date: September 16, 2022
Portfolio weighting: 10%
Number of Contracts = 11 contracts
I will be the first to admit that at the height of the summer doldrums, and at the top of a 10% move in the market, there are very few attractive trades out there on a risk/reward basis.
Not only that, the volatility Index (VIX) has just suffered a decline from $36 to $19 in just 2 months. The few trades out there pay very little. And with the Mad Hedge Marketing Timing Index at 54, it is screaming at us that there is nothing to do.
There is no law that you have to have a position every day of the year. Overtrade your account and only the brokers win. I’m all about cherry-picking.
At least with the (SPY), we have a short-term double top that may be unfolding.
Therefore, I am recommending the S&P 500 (SPY) September 2022 $445-$455 in-the-money vertical bear put spread at $9.00 or the best
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and increase your bid by 5 cents with a second order.
Don’t pay more than $9.30 or you will be chasing.
If you don’t do options, stand aside. This is a short-term options play only.
This is a bet that the S&P 500 (SPY) will not trade above $445.00 by the September 16 options expiration day in 25 trading days.
Here are the specific trades you need to execute this position:
Buy 11 September 2022 (SPY) $455 puts at………....…$36.00
Sell short 11 September 2022 (SPY) $445 puts at…….$27.00
Net Cost:………….......……………….……….………......….....$9.00
Profit: $10.00 - $9.00 = $1.00
(11 X 100 X $1.00) = $1,100 or 11.11% in 25 trading days.
If you are uncertain about how to execute an options spread, please watch my training video by clicking here.
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.
Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.