Trade Alert - (TLT) April 16, 2018 TAKE PROFITS
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 - (TLT) ? TAKE PROFITS
Sell the iShares Barclays 20+ Year Treasury Bond Fund (TLT)April, 2018 $123-$126 in-the-money vertical BEAR PUT spread at $2.98
Closing Trade-NOT FOR NEW SUBSCRIBERS
4-16-2018
expiration date:?April 20, 2018
Portfolio weighting: 10%
Number of Contracts = 38 contracts
The bond market is starting to fall apart once again, thanks the government hammering of the market with massive new issuance. The long feared trillion dollar deficits are here.
As a result, the value of our bond put spread has leapt to its maximum value of $3.00. It?s time to take the money and run, as the risk/reward of continuing with this position is no longer favorable. It?s not worth it to carry the position for four more trading days for only two cents.
Better to free up the cash to plow it into the next position.
I am therefore selling the iShares Barclays 20+ Year Treasury Bond Fund (TLT)?April, 2018 $123-$126 in-the-money vertical BEAR PUT spread at $2.98.
This was a bet that the (TLT) would not rise above $123 by the?April 20options expiration days in 32 trading days.
By coming out here you get to reap a 10.37% profit in 27 trading days.
Here are the specific trades you need to close out this position:
Sell 38 April, 2018 (TLT) $126 puts at??????.?$5.60
But to Cover short 38 April, 2018 (TLT) $123 puts at?.$2.62
Net Proceeds:??????????..????.?...
Profit: $3.00 - $2.70 = $0.28
(38 X 100 X $0.28) = $1,064 or 10.37% in 27 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 on How to Execute Vertical Call and Put Debit Spreads by clicking here.
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Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
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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 close to expiration.
If you don't get done, don't worry. There are another 250 Trade Alerts coming at you over the coming 12 months.