Trade Alert - (T) January 23, 2014
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, 2014 $35-$37 in-the-money bear put spread at $1.97 or best
Closing Trade ? Not for new subscribers
1-23-2014
expiration date: February 21, 2014
Portfolio weighting: 10%
Number of Contracts = 60 contracts
With 86% of the potential profit in hand and a full month to go until the February 21 expiration, this is too tempting a profit to leave alone. I am therefore selling my AT&T (T) February, 2014 $35-$37 in-the-money bear put spread. There is nothing more refreshing than having a ton of cash on your trading market in a dead market.
I wish they were all this easy. In fact, I wanted a 20% short weighting in (T) to offset my 20% long in Softbank (SFTBY). But (T) fell away too quickly. I was too right, too fast.
By now, you?ve all become experts on the travails of Ma Bell. You already understand why this can become a recurring trade on the short side for the rest of 2014. All I need is a $2 rally off of $33.25 to get back in.
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.
Keep in mind that these are ballpark prices only. Spread pricing can be very volatile on expiration months farther out.
If you can?t do the options then just sell short the stock outright with a tight stop. We could be in for some mileage here.
Here are the specific trades you need to execute this position:
Sell 60 February, 2014 (T) $37 puts at???????$3.78
Buy to cover short 60 February, 2014 (T) $35 puts at????..$1.81
Net Cost:?????????????????.......$1.97
Profit: $1.97 - $1.79 = $0.18
(60 X 100 X $0.18 ) = $1,080 or 1.08% profit for the notional $100,000 portfolio.
