Trade Alert - (SPY) EXPIRATION June 22, 2015
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.
Trade Alert - (SPY)- EXPIRATION
Expiration of the S&P 500 SPDR?s (SPY) June, 2015 $201-$204 in-the-money vertical bull call spread at $3.00
Closing Trade ? NOT FOR NEW SUBSCRIBERS
6-22-2015
expiration date: June 19, 2015
Portfolio weighting: 10%
Number of Contracts = 43 contracts
It did turn out that the market continued to grind sideways and climb a wall of worry, as I expected.
You got to have your cake and eat it too, making money on the long side, even though the market went nowhere. Such is the beauty of the in-the-money vertical bull call spread.
As a result, the S&P 500 SPDR?s (SPY) June, 2015 $201-$204 in-the-money vertical bull call spread expired on Friday at its maximum potential value of $3.00. Your profit on this position came to a healthy 13.2% in only 10 trading days.
Way to Go!
This is the first of two spread positions with the June expiration. Both turned out profitable.
The technical term for the pair of trades you successfully executed this month is called a ?short strangle.? In other words, you had a bet on that the S&P 500 would not trade below $204 or above $214 on June 19. As it turned out, the (SPY) closed at $210.81, with plenty of room to spare.
This is usually a good strategy to employ just as we are going into what will be a painfully boring summer. Indirectly, you are short volatility and short accelerated time decay. Both worked.
It is unusual for a hedge fund manager to make money on both his long positions and his short positions at the same time. Few have such a precise market read.
However, we managed to pull it off this month, much to the delight of our readers and their pocketbooks.
The longs mostly went up and the shorts went down. It was a perfect world. This we managed to accomplish while most traders are barely making any money at all this year, grinding their teeth along the away.
Sometimes, 45 years worth of experience doing this stuff helps. This is what you pay me for.
On to the next trade!
Here are the specific values for your expiring options:
Buy 43 June, 2015 (SPY) $201 Calls at?????$9.81
Sell short 43 June, 2015 (SPY) $204 Calls at..?$6.81
Net Cost:??????????????????.....$3.00
Profit: $3.00 - $2.65 = $0.35
(43 X 100 X $0.35) = $1,505 or 1.50% profit for the notional $100,000 portfolio.
