Trade Alert - (TLT) August, 15, 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.
Trade Alert - (TLT)
Sell the iShares Barclay 20+ Year Treasury Bond Fund (TLT) August, 2014 $117-$120 in-the-money bear put spread at $2.83 or best
Closing Trade
8-15-2014
expiration date: August 15, 2014
Portfolio weighting: 10%
Number of Contracts = 37 contracts
?
These options expire in a few hours, so I am going to come out here, rather than hang on for the last dollar. We are bouncing around the $117 strike in the (TLT), and it?s a coin toss as to whether will close above or below that number.
Rather than risk a last minute spike into the close that leaves us naked short the (TLT) over the weekend, I am going to take profits here, and leave some money on the table.
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. It is clear that these desperate policies are already working.
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 37 August, 2014 (TLT) $120 puts at?????$2.98
Buy to cover short 37 August, 2014 (TLT) $117 puts at..??.$0.15
Net Cost:??????????????????.....$2.83
Profit: $2.83 - $2.61 = $0.22
(37 X 100 X $0.22) = $814 or 0.81% profit for the notional $100,000 portfolio.
