When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.
Trade Alert - (VXX)- TAKE PROFITS
SELL the iPath S&P 500 VIX ETN (VXX) April, 2017 $19.00-$19.50 in-the-money vertical bear put spread at $0.47 or best
Expiration Date: April 21, 2017
Portfolio Weighting: 5%
Number of Contracts = 125 contracts
Yes, I’ll take a 17.50% profit in three trading days.
You wouldn’t believe how much abuse I got from readers telling me I was MAD selling short the Volatility Index (VIX) ahead of a three day weekend.
But that is where the money is made.
Market’s are getting more squirrely than usual, so I am going to grab my profits where I can.
The ten-year Treasury bond yield at 2.20%? You’ve got to be kidding. Markets seem to be entering a period when they are totally unpredictable.
Remember that “Sell in May” thing? It’s a short nine trading days away.
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 Bull Call 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 with only 3 days to expiration.
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:
SELL 125 April, 2017 VXX $19.50 puts at…….….……$2.00
Buy to cover short 125 April, 2017 VXX 19.00 puts at..$1.53
Profit: $0.47 - $0.40 = $0.07
(125 X 100 X $0.07) = $875 or 17.50% profit in three trading days.