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)- TAKE PROFITS
SELL the S&P 500 SPDR?s (SPY) October, 2015 $202-$205 in-the-money vertical bear put spread at $2.90 or best
expiration date: October 16, 2015
Portfolio weighting: 10%
Number of Contracts = 38 contracts
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of optionshouse.
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.
Here are the specific trades you need to execute this position:
Sell 38 October, 2015 (SPY) $205 puts at????.??$16.70
Buy to cover short 38 October, 2015 (SPY) $202 puts at?$13.80
Potential Profit at expiration: $2.90 – $2.55 = $0.35
(38 X 100 X $0.35) = $1,330 or 1.330% profit for the notional $100,000 portfolio