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.
Further Update to: Trade Alert -(XLI)
Sell the Industrials Select Sector SPDR (XLI) December, 2013 $45-$48 call spread at $2.95 or best
Closing Trade – not for new readers
11-25-2013
expiration date: December 20, 2013
Portfolio weighting: 10%
Number of contracts = 38 contracts
It is amazing looking at my model trading portfolio and discovering that my oldest position only dates back to November 7. Since September, every position that I have slapped on has become immediately profitable and then gone straight up.
Please excuse me for reveling in all of this, but markets like this have occurred too rarely in my long and tortured life. Please indulge an old man his fleeting pleasures.
I picked industrials as a top performer for this month, and they have been absolutely en fuego. What’s more, I believe that they will run well into next year. This is the sweet spot for the global synchronized recovery that is coming in 2014. Keep that thought in your mind. You are going to hear a lot about it next year.
However, we have sucked the marrow out of this position, so it is time to take profits and plow the money into another, more profitable one.
We grabbed almost 100% of the potential profit holding the position a mere eleven trading days. This is my 16th consecutive closing Trade Alert, and the 21st including my remaining open profitable positions. I have only six more to go until a break my previous record of 25. It doesn’t get any better than this.
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.
Keep in mind that these are ballpark prices only. Spread pricing can be very volatile on expiration months farther out.
Here are the specific trades you need to execute this position:
Sell 38 December, 2013 (XLI) $45 calls at……………$5.40
Buy to cover short 38 December, 2013 (XLI) $48 calls at..…….$2.45
Net Cost:………………………………………………..$2.95
Profit: $2.95 – $2.55 = $0.40
(38 X 100 X $0.40) = $1,520 or 1.52% profit for the notional $100,000 portfolio.
