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.
Trade Alert - (TLT)-BUY
BUY the iShares 20+ Year Treasury Bond ETF (TLT) June, 2017 $126-$129 in-the-money vertical BEAR PUT spread at $2.55 or best
Expiration Date: June 16, 2017
Portfolio Weighting: 10%
Number of Contracts = 39 contracts
I think the fireworks are over for now.
The furor over Trump abuses reached an apex yesterday, and he is now very conveniently leaving the country.
With the appointment of my friend, former FBI chief and fellow Marine Captain, Robert Mueller as a special prosecutor, the many scandals revolving around the president will move off the headlines for the time being.
It will take many months of investigation for him to reach any conclusions, and you can BET there won’t be any leaks out of his office.
I know Robert to be a true patriot, honest to a tee, and a real hard ass.
That means that the US Treasury bond market will soon go to sleep, or even sell off.
Stocks may continue to drift down from an extremely overbought condition, but we won’t be seeing many triple digit days from here.
For more on this, please read my piece “Ten Reasons Why Stocks Can’t Sell Off Big Time .
With bonds now at a 2.21% yield, I am willing to bet they won’t go much lower, at least within the next four weeks.
So I am going to buy the iShares 20+ Year Treasury Bond ETF (TLT) June, 2017 $126-$129 in-the-money vertical BEAR PUT spread at $2.55 or best.
To lose money on this position, yields would have to drop below 2.05% which they won’t. That would be a new seven-month low.
Don’t pay more than $2.65 for this position or you’ll be chasing.
If you don’t do options, this would be a great level to scale into a long in the ProShares Ultra Short 20+ Treasury Bond Fund (TBT), a bet that bonds will fall.
Take a look at the chart below, which is showing a clear double bottom setting up for the TBT.
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 this options spread, please watch my training video “How to Execute a Vertical Bear Put Debit 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.
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Here Are the Specific Trades You Need to Execute This Position:
Buy 39 June, 2017 TLT $129 puts at………….………$5.35
Sell short 39 June, 2017 TLT $126 puts at………….$2.80
Profit: $3.00 - $2.55 = $0.45
(39 X 100 X $0.45) = $1,755 or 17.64% in 21 trading days.