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Trade Alert - (SPY) October 30, 2020 - 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

 

Trade Alert - (SPY) - BUY

BUY the S&P 500 (SPY) November 2020 $280-$290 in-the-money vertical Bull Call spread at $8.90 or best

Opening Trade

10-30-2020

expiration date: November 20, 2020

Portfolio weighting: 10%

Number of Contracts = 12 contracts

Here is my election play.

No matter who wins the election, interest rates are still near zero, the Fed is still flooding the financial system with cash, and massive stimulus is about to hit the economy.

This is still a liquidity-driven bull market.

For the first time in seven months, my Mad Hedge Market Timing Index has finally entered BUY territory at 28.

With the Volatility Index (VIX) over $40, it is almost impossible to lose money on a short-dated deep-in-the-money call spread.

Stocks are now down 9.8% from their market highs. That is not a bad initial long side entry point. This position also gets huge support from the 200-day moving average at $310.29.

I am therefore buying the S&P 500 (SPY) November 2020 $280-$290 in-the-money vertical Bull Call spread at $8.90 or best.

Don’t pay more than $9.20 or you’ll be chasing.

If you don’t do options, just buy the (SPY) outright for a bounce.


Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.

This is a bet that the S&P 500 (SPY) will not trade below $290.00 by the November 20 option expiration day in 15 trading days.

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

Buy 12 November 2020 (SPY) $280 calls at………...………$46.00

Sell short 12 November 2020 (SPY) $290 calls at………….$37.10

Net Cost:………………………….………..………..............….….....$8.90

Potential Profit: $10.00 - $8.90 = $1.10

(12 X 100 X $1.10) = $1,320 in 15 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 by clicking here.

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 on expiration months farther out.

Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.

 

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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 Trader2020-10-30 14:12:522020-10-30 14:12:52Trade Alert - (SPY) October 30, 2020 - BUY

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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.

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