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) - BUY
BUY the IPath S&P 500 VIX Short Term Futures ETN (VXX) August, 2017 $10.00-$10.50 in-the-money vertical bull call spread at $0.36 or best
Opening Trade
7-28-2017
expiration date: August 18, 2017
Portfolio weighting: 5% (Correction from Text Alert)
Number of Contracts = 116 contracts
This is a bet that the (VXX) will not trade below $10.50 by the August 18 expiration in 23 trading days, or down 6.65% from the current print, versus the current $11.38 print.
Don't pay more than $0.43 for this position or this risk/reward will tip against you.
If you can't do options, then buy the (VXX) outright for a short-term trade.
It is prudent for me to add some downside protection by add a long position in the RISK ON Volatility Index against any future RISK OFF long positions I may add.
Today, fire insurance is on sale.
I am therefore buying a 10% position in the IPath S&P 500 VIX Short Term Futures ETN (VXX) August, 2017 $10.00-$10.50 in-the-money vertical bull call spread at $0.38.
That way, if something unforeseen happens sometimes, someplace, somewhere, what we lose in our long positions will be partially offside by profits in the (VXX).
Please note that the strikes in this spread area now all times lows for the (VXX), and we are stepping in with the (VIX) itself at 20 year lows.
Please note also that because of the large number of contracts, the position will be sensitive to the commission rate you pay your broker.
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video on How to Execute a Vertical Bull Call Spread by clicking here at http://www.madhedgefundtrader.com/ltt-executetradealerts/.
You must be logged into your account to view the video.
Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In today's market, investors need every advantage they can get.
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 13 days to expiration.
If you don't get done, don't worry. There are another 250 Trade Alerts coming at you over the coming 12 months.
Here are the specific trades you need to execute this position:
Buy 116 August, 2017 (VXX) $10.00 calls at - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $1.52
Sell short 116 August, 2017 (VXX) $10.50 calls a - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $1.16
Net Cost: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - $0.36
Potential Profit: $0.50 - $0.36 = $0.14
(116 X 100 X $0.14) = $1,624 or 38.9% profit in 15 trading days.
