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.
Trade Alert – (SPY)- BUY
Buy the S&P 500 SPDR?s (SPY) August, 2016 $221-$224 in-the-money vertical bear put spread at $2.65 or best
expiration date: August 19, 2016
Portfolio weighting: 10%
Number of Contracts = 37 contracts
US Q2 GDP came in at an extremely disappointing 1.2% this morning. What?s worse, Q1 GDP was revised down from 1.1% to 0.80%.
Clearly, the economy is growing much slower than anyone expected.
Also, last night, the Bank of Japan delivered a much weaker than expected monetary stimulus, causing the yen to rocket.
I am therefore going to take another shot on the short side in the S&P 500.
You can pay all the way up to $2.75 for this spread and it still makes sense.
If you can?t do the options, buy the ProShares Short S&P 500 Short Fund ETF (SH) (click here for the prospectus at http://www.proshares.com/funds/sh.html), or the ProShares Ultra Short S&P 500 Short Fund 2X ETF (SDS) (click here for the prospectus at http://www.proshares.com/funds/sds.html).
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of optionshouse.
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 https://www.madhedgefundtrader.com/ltt-executetradealerts/. You must me logged into your account to view the video.
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 with only 9 days to expiration.
Here are the specific trades you need to execute this position:
Buy 37 August, 2016 (SPY) $224 puts at????.?.??$7.40
Sell short 37 August, 2016 (SPY) $221 puts at.???.?..$4.75
Potential Profit: $3.00 – $2.65 = $0.35
(37 X 100 X $0.35) = $1,295 or 13.20% profit in 14 trading days.