• support@madhedgefundtrader.com
  • Member Login
Mad Hedge Fund Trader
  • Home
  • About
  • Store
  • Luncheons
  • Testimonials
  • Contact Us
  • Click to open the search input field Click to open the search input field Search
  • Menu Menu

Trade Alert - (SPY) December 18, 2018 - BUY

Trade Alert

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.


Alert

 

BUY the S&P 500 (SPY) January 2019 $230-$240 in-the-money vertical BULL CALL spread at $9.00 or best
 

Opening Trade

12-18-2018

expiration date: January 18, 2019

Portfolio weighting: 10%

Number of Contracts = 11 contracts

With the Mad Hedge Market Timing Index at 5, a 30-year low, there is nearly a 100% chance that this will be a successful trade. If you don’t use a “BUY” signal this strong, you might as well take your entire trading strategy and throw it in the trash.

I am therefore buying the S&P 500 (SPY) January 2019 $230-$240 in-the-money vertical BULL CALL spread at $9.00 or best.

This is a bet that the S&P 500 (SPY) will not trade below $240 by the January 18 option expiration day in 20 trading days. That is a level 6.25% down from the current price.

That would bring the total correction to 18.08% from the $293 top, highly unlikely with proof of an actual recession. Today, the (SPY) is trading at $256.55.

This is also a very conservative trade. It is very deep-in-the-money, short dated (one month to expiration), and has a $10 spread between the strikes. There are also three public holidays during the life of this position, and generally slow, low-volume trading conditions. That should greatly reduce the day-to-day volatility of your portfolio. Only the extremely elevated levels of market volatility make this trade possible.

Don't pay more than $9.50 or you'll be chasing.

If you don’t do options, buy the (SPY) outright for a quick end of year oversold trading bounce.

Here are the specific trades you need to execute this position:

Buy 11 January 2019 (SPY) $230 calls at………….………$27.00

Sell short 11 January 2019 (SPY) $240 calls at……...$18.00
Net Cost:………………………….………..………….….....$9.00

Potential Profit: $10.00 - $9.00 = $1.00

(11 X 100 X $1.00) = $1,100 or 11.11% in 20 trading days.

 

 

 

To see how to enter this trade in your online platform, please look at the order ticket above, which I pulled off of Interactive Brokers.

If you are uncertain on how to execute an options spread, please watch my training video on How to Execute Vertical Call and Put Debit Spreads by clicking here.

You must be logged in to your account to view the video.

Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.

Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In today's market, investors need every advantage they can get.

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 close to expiration.

If you don't get done, don't worry. There are another 250 Trade Alerts coming at you over the coming 12 months.

Share this entry
  • Share on Facebook
  • Share on X
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share by Mail
https://www.madhedgefundtrader.com/wp-content/uploads/2016/02/Alert-e1457452190575.jpg 135 150 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2018-12-18 12:18:512018-12-18 12:18:51Trade Alert - (SPY) December 18, 2018 - BUY

tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Mad Hedge Fund Trader (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade. 

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

Copyright © 2025. Mad Hedge Fund Trader. All Rights Reserved. support@madhedgefundtrader.com
  • Privacy Policy
  • Disclaimer
  • FAQ
Link to: Mad Hedge Hot Tips for December 18, 2018 Link to: Mad Hedge Hot Tips for December 18, 2018 Mad Hedge Hot Tips for December 18, 2018 Link to: December 18, 2018 - MDT Alert (FB) Link to: December 18, 2018 - MDT Alert (FB) December 18, 2018 - MDT Alert (FB)
Scroll to top