Trade Alert - (T) February 6, 2015
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. This is your chance to ?look over? John Thomas? shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen.
Trade Alert - (T)
Sell the AT&T (T) February, 2015 $35-$37 in-the-money bear put spread at $1.85 or best
Closing Trade
2-6-2015
expiration date: February 20, 2015
Portfolio weighting: 10%
Number of Contracts = 60 contracts
You can sell this spread anywhere in the $1.75 -$1.85 range and make a reasonable profit.
This short position did its job in that it protected other long positions nicely during last month?s difficult trading conditions. And we can still get out here with a nice 1.20% profit with two weeks left to expiration.
Keep in mind that the options market is highly illiquid now, so don?t hold me to these prices. They are ballpark estimates, at best.
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.
If the price of this spread has moved more than 5% by the time you receive this Trade Alert, don?t chase it. Wait for the next one. There are plenty of fish in the sea.
Here are the specific trades you need to execute this position:
Sell 60 February, 2015 (T) $37 puts at?????$2.42
Buy to cover short 60 February, 2015 (T) $35 puts at..??.$0.57
Net Cost:??????????????????.....$1.85
Profit: $1.85 - $1.65 = $0.20
(60 X 100 X $0.20) = $1,200 or 1.20% profit for the notional $100,000 portfolio.
