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)-TAKE PROFITS
SELL the iShares 20+ Year Treasury Bond Fund ETF (TLT) June 2016 $124-$127 in-the-money vertical bull call spread at $2.82 or best
expiration date: June 17, 2016
Portfolio weighting: 10%
Number of Contracts = 38 contracts
I am going to double de-risk here ahead of the May nonfarm payroll on Friday and the flip-flopping Fed on June 14.
Taking small profits has been the lesson of May. At the $2.82 price, we are capturing 45.45% of the maximum potential profit in this position.
This morning?s twin data disappointments give us a nice pop in the (TLT) for an exit point in our iShares 20+ Year Treasury Bond Fund ETF (TLT) June 2016 $124-$127 in-the-money vertical bull call spread.
May Consumer Confidence came in at 92.6 versus the 96.0 that was expected.
May Chicago Purchasing Managers Index printed at 49.3 as opposed to the hoped for 50.5
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 on how to execute an options spread, please watch my training video on ?How to Execute a Bull Call Spread? by clicking here at https://www.madhedgefundtrader.com/ltt-executetradealerts/. You must me logged into your account to view the video.
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 38 June, 2016 (TLT) $124 calls at????.?.??$5.30
Buy to cover short 38 June, 2016 (TLT) $127 calls at?…$2.48
Profit: $2.82 – $2.67 = $0.15
(38 X 100 X $0.15) = $570 or 5.62% profit in 5 trading days