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)- TAKE PROFITS
SELL the SPDR S&P 500 (SPY) May, 2017 $242-$245 in-the-money vertical bear put spread at $2.94 or best
Closing Trade-NOT FOR NEW SUBSCRIBERS
Expiration Date: May 19, 2017
Portfolio Weighting: 10%
Number of Contracts = 38 contracts
Now that we have made a marginal new high in the S&P 500, I am going to take profits on my short position in the SPY. We could grind up a few more bucks from here.
Time to take the money and run.
I am therefore selling my position in the SPDR S&P 500 (SPY) May, 2017 $242-$245 in-the-money vertical bear put spread at $2.94 or best.
With only eight trading days to expiration, we have captured 84.62% of the maximum potential profit.
A 12.64% profit in only seven trading days is welcome any time.
I can trade up markets and down market. But markets that dont move at all are the hardest kind of all to trade.
The Volatility Index (VIX) crash here is concerning. What always follows a crash? A huge rally.
Risk in the markets is therefore very high.
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 about how to execute this options spread, please watch my training video How to Execute a Vertical Bear Put Debit Spread.
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.
Dont execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile with only eight days to expiration.
Please keep in mind these are ballpark prices at best. After the text alerts go out, prices can be all over the map. There is no telling how much the market will have moved by the time you get this email.
Paid subscribers, be sure you've signed up for our FREE text service for Trade Alerts. When seconds count, this feature offers a definite trading advantage. In today's volatile markets, individual investors need every advantage they can get.
Here Are the Specific Trades You Need to Execute This Position:
Sell 38 May, 2017 SPY $245 puts at . .. $5.40
Buy to cover short 38 May, 2017 SPY $242 puts at.
Net Proceeds: ......$2.94
Profit: $2.94 - $2.61 = $0.33
(38 X 100 X $0.33) = $1,254 or 12.64% profit in seven trading days.