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 Barclays 20+ Year Treasury Bond Fund January, 2014 $106-$109 bear put spread at $2.90 or best
expiration date: 1-17-2013
Portfolio weighting: 10%
Number of Contracts = 40 contracts.
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 further out.
Here are the specific trades you need to execute this position:
Sell 40 January, 2014 (TLT) $109 puts at?????…..?$6.95
Buy to cover short 40 January, 2014 (TLT) $106 puts at?$4.05
Profit: $2.90 – $2.50 = $0.40
($0.40 X 100 X 40) = $1,600 or 1.60% for the notional $100,000 model portfolio.