Taking Profits On Our SPY Put Spread

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Trade Alert - (SPY)- TAKE PROFITS

SELL the S&P 500 SPDR’s (SPY) August, 2016 $221-$224 in-the-money vertical bear put spread at $2.68 or best

Closing Trade

7-25-2016

expiration date: August 19, 2016

Portfolio weighting: 10%

Number of Contracts = 38 contracts

 

The market isn’t giving you a lot of profits these days.

So I am going to take the small one we have in the S&P 500 SPDR’s (SPY) August, 2016 $221-$224 in-the-money vertical bear put spread.

A 6.34% profit in a single position is not bad during these dreadful summer doldrums.

No is it to be poo-pooed spare change from stock market all time highs.

Better to be flat going into the  bigtech earnings this week, which should be good, and the FOMC meeting on Wednesday at 2:00 PM EST, when they will do absolutely nothing.

To see how to exit 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 Vertical Bear Put Debit Spread” by clicking here at http://members.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 with only 9 days to expiration.

Here are the specific trades you need to execute this position:

Sell 38 August, 2016 (SPY) $224 puts at………….….……$8.10

Buy to cover short 38 August, 2016 (SPY) $221 puts at...$5.42
Net Proceeds:…………………………………………………......$2.68

Profit: $2.68 - $2.52 = $0.16

(38 X 100 X $0.16) = $608 or 6.34% profit in 7 trading days

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