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 SPDR’s (SPY) August, 2017 $250-$253 in-the-money vertical bear put spread at $2.68 or best
expiration date: August 18, 2017
Portfolio weighting: 10%
Number of Contracts = 37 contracts
This is a bet that the (SPY) will not rise above $250 by the August 18 expiration date in 15 trading days.
Don’t pay more than $2.75 for this position, or you’ll be chasing.
Risk in the market is extremely high and it is begging for a correction.
A lot of companies are about to disappoint.
And price earnings multiple are just below century highs?
It may be that many investors are willing to “look through” the weak second quarter earnings to a third quarter rebound.
It also may be that the Fed raises interest rates so slowly that no one notices.
That may be. So If I am wrong on my timing here I will stop out of this position quickly.
That is why I am going deep in the money with this put spread.
The market still has to climb a wall of worry.
If you can’t do options buy the ProShares Short S&P 500 ETF (SH) for a short term trade only. I still believe the medium term direction of the stock market is still up.
I think that as long as we are stuck in gridlock in Washington DC, markets will remain trapped in tedious, hair-tearing-out, narrow ranges.
Also preventing any action whatsoever are a number of impending congressional breaks.
To see how to enter this trade in your online platform, please look at the order ticket below, 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 a Vertical Bear Put Debit Spread“ by clicking here at http://members.madhedgefundtrader.com/ltt-executetradealerts/.
You must be logged into 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.
Here are the specific trades you need to execute this position:
Buy 37 August, 2017 (SPY) $253 puts at…………………………………$6.60
Sell short 37 August, 2017 (SPY) $250 puts at………………………..$3.92
Potential Profit: $3.00 – $2.68 = $0.32
(37 X 100 X $0.32) = $1,184 or 11.94% profit 15 trading days.