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 – (VXX)
Buy the iPath S&P 500 VIX (VXX) Short Term Futures ETN at $43.39 or best
Opening Trade-Double Up
Portfolio weighting: increase from 10% to 20%
Number of Contracts = 230 contracts
I may be a little early here. The textbook says I should wait until the new quarter starts on April 1 to lay on this trade. But this is a good place to double up my position in the (VXX) and lower my average cost.
However, since this is an ETN and there is no time decay, I can sit with the (VXX) for a month if I have to. I am confident it will flat line until we get a market correction, which will then cause the (VXX) to jump 10%-20%.
It?s basically a free put on the market, and I can you it to hedge the downside risk of any longs I wish to add on latter, such as in Google (GOOG) or Apple (AAPL).
It?s a good idea to take out insurance like this as we head into the seasonally weak May-November period. As everyone in California can tell you, it is cheaper to buy earthquake insurance now, rather than after a Richter Scale 9 shaker.
Note: This is not an option trade. It is an exchange traded note. Therefore, you buy the shares like any other stock or ETF.
Here are the specific trades you need to execute this position:
Buy 230 shares at ????.$43.39
(230 shares X $43.39) = $9,979.70