Trade Alert: SPY

By Stephen Leeb • January 30, 2018

Sell to close the SPDR S&P 500 ETF (NYSE: SPY) June 15, 2018 $283 put option.

While the market could have a little more downside from here, we will take the nice gain in this trade at this time.

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Paul

01/30/18 ‐ 10:39am ET January 30, 2018 at 10:39am ET

Sold SPY for $8.72 on Fidelity. Thank You.

Ajax

01/30/18 ‐ 10:54am ET January 30, 2018 at 10:54am ET

A one day trade of 25% for me. Mille grazie buon signor.

Rick

01/30/18 ‐ 11:39am ET January 30, 2018 at 11:39am ET

Sold at $8.90 which was a 22% two gain for me. I thought about doing this myself earlier in the day, but waited. Hopefully we can get back in soon if your indicators still signal a buy.

Scott Chan

01/30/18 ‐ 2:04pm ET January 30, 2018 at 2:04pm ET

Gentlemen, glad to see you did well. Hope many more profitable trades to come.

Ray

01/31/18 ‐ 12:41pm ET January 31, 2018 at 12:41pm ET

I’m very happy with this successful trade.

I’d like to ask a question about the expiration choice.

Why was the June expiration chosen? This tied up so much capital, on a per share basis, that the ROI here was stunted significantly. Had we selected the Feb or March we could have doubled or tripled our ROI.

Was this position always intended as a very short term trade?

Scott Chan

01/31/18 ‐ 1:08pm ET January 31, 2018 at 1:08pm ET

Dear Ray,

It’s basically a way to manage risk.

The stock indicator caught the timing of the market pullback perfectly this time, but in practice this won’t always be the case. The indicator could predict the direction of the market correctly, but it could still take a week or two for the market to move as it predicts. Choosing an expiration date a few months down the road provides more leeway for the trade to be profitable and reduces the chance for huge losses.

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About The Author

Stephen Leeb

Bio | Archive

Stephen Leeb, Ph.D. is the Chief Investment Strategist of The Complete Investor and Real World Investing.

Dr. Leeb’s books have been notable for predicting the secular bull market that started in the 1980s (Getting in on the Ground Floor, Putnam, 1986); the tech stock crash and rise of real assets, including oil and gold (Defying the Market: Profiting in the Turbulent Post-Technology Market Boom, McGraw-Hill, 1999); and the surge in oil prices (The Oil Factor: Protect Yourself and Profit from the Coming Energy Crisis, Warner Books, 2004). His national bestseller, The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel (Warner Books, 2006), co-authored with Glen Strathy, outlined the biggest challenges facing the US economy, and accurately predicted the 2008 sub prime mortgage crisis as well as the vicious subsequent economic cycle requiring massive infusions of government stimulus, near zero interest rates and much higher federal debt levels. Game Over: How You Can Prosper in a Shattered Economy (Business Plus, 2009) predicted a permanent peak in global commodity production. Dr. Leeb’s eighth and latest book, Red Alert (Hachette, 2011), outlined China’s growing prosperity and the ways in which its demands on increasingly scarce resources threaten the American way of life.

Among his many speaking engagements, he has been the keynote speaker at both a JPMorgan Chase energy conference and a Royal Bank of Canada commodities conference.

Dr. Leeb received his bachelor’s degree in Economics from the University of Pennsylvania’s Wharton School of Business. He then earned his master’s degree in Mathematics and Ph.D. in Psychology from the University of Illinois in just three years, an academic record that stands to date. He is frequently quoted in the financial media, including Investors Business Daily, USA Today, Business Week, The New York Times, NPR and The Wall Street Journal. In addition, Dr. Leeb is a regular guest on Fox News, Bloomberg, CNN and Neil Cavuto.