Trade Alert - (TLT) December 2, 2016
When a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what security to buy, 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.
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Trade Alert - (TLT)- Buy
Buy the iShares 20+ Year Treasury Bond Fund (TLT) January, 2017 $125-$128 in-the-money vertical bear put spread at $2.55 or best
?Opening Trade
12-2-2016
Expiration Date: January 20, 2017
Portfolio Weighting: Increase from 10% to 20%
Number of Contracts = 39 contracts
I am going to use this two and a half point rally off the bottom in the (TLT) to DOUBLE UP my short position in the Treasury bond market.
Don?t pay more than $2.65 for this spread or you?ll be guilty of chasing.
If you can?t trade options, buy the ProShares UltraShort 20+ Year Treasury (TBT) for a medium term view. Potentially it could double from here over the next four years.
This is a bet that the iShares 20 Year+ Treasury Bond ETF (TLT) will not close above $125 by the January 20, 2017 expiration in 33 trading days.
That works out to a yield on the 10-year Treasury bond of 2.15%, versus the current 2.40%.
I?m sorry, but I just don?t see a 25 basis point dip in bond yields going into three interest rates hikes by the Federal Reserve that start in a few weeks, and a possible tripling in bond yields over the next four years.
One outcome of the presidential election is that I expect yields on the ten-year Treasury to rise to as high as 6.0% within four years, taking the iShares 20 Year+ Treasury Bond ETF (TLT) down $50 to as low as $70.
Low risk, high return, I love it!
Open your online trading platform please.
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of OptionsHouse.
If you are uncertain about how to execute an options spread, please watch my training video ?How to Execute a Vertical Bear Put Spread?
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.
Please keep in mind these are ballpark prices at best. After the text alerts go out, prices can be all over the map. There is no telling how much the market will have moved by the time you get this email.
Paid subscribers, be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage.? In today's volatile markets, individual investors need every advantage they can get.
Here Are the Specific Trades You Need to Execute This Position:
Buy 39 January, 2017 (TLT) $128 puts at????.???$8.70
Sell short 39 January, 2017 (TLT) $125 puts at..????.$6.15
Net Cost:????????????????..??.?.....$2.55
Potential Profit: $3.00 - $2.55 = $0.45
(39X 100 X $0.45) = $1,755 or 17.64% in 33 trading days.
