Trade Alert: Open SPY call option

By Stephen Leeb • February 9, 2018

Buy to open the SPDR S&P 500 ETF (NYSE: SPY) June 15, 2018 $262 call option. 

My stock indicator is positive now and I think there’s a good chance the signal will get stronger. 

Still, the stock indicator signal is not quite as strong as the gold stock indicator, so this trade will go into Pot 3. 

In reference to the Three-Pot System, I will raise the money by selling half of the position in Despegar.com (NYSE: DESP) and using the proceeds to purchase this SPY call. 

Editor’s Note: The above paragraph only applies to former Aggressive Trader subscribers who have purchased DESP in Pot 3. If you do not own shares of DESP, simply purchase the SPY call.

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Ajax

Ajax

I wish I could tell when this Alert came out; I never received another notice and was checking the website throughout the day. I know that it must have come out before 3 pm because I did get the Velocity Trader alert. [Perhaps the website could display the time next to the date at the top of every Alert.]

I mention it because I would be hesitant to get in on this call now. Prior to 3 pm, SPY180615C262 was trading at a premium of under $11. Around 1:30 pm the option was trading under $10 for a few minutes. My guess is that this Alert was triggered around that time. From the portfolio, I can see the official entry point at $11.06. Now, however, the mid is $12.12 and one might be missing out on a significant amount of the target gain.

I guess the bigger question I have at this point is, how long do you see being in this position? Is the idea to get out after a 20% gain? Was there a target purchase you had in mind? Thanks for the help.

Andrew

Jeffrey J

Jeffrey J

I need similar guidance. Questions for Dr. Leeb or for Scott Chan or Jim Pearce: Does the alert have an associated time frame over which the call is suggested to be purchased? Or is there a maximum purchase price recommended? And will another alert be sent when it is advised that the call be sold? Note: I am not a former Aggressive Trader subscriber. Thank you.

Scott Chan

Scott Chan

Dear Jeffrey,

Steve has just closed out the option.

Please also see my response to Ajax above.

Jeffrey J

Jeffrey J

Yes. Thank you. But as a general question, will trades such as this one have an attached recommended limit for a purchase price? Or a time frame over which the call should be purchased (e.g., a number of days or hours, etc.)? I did receive the alert in a timely fashion by email and text, but still couldn’t be sure if the price I saw available was within the range of expectations.

Chee L.

Chee L.

I second Jeffrey’s questions, and Andrew’s suggestion to time stamp the alert (preferably also add the official entry price next to the time stamp for quick reference). These will be really helpful for some of us. Thanks.

Scott Chan

Scott Chan

Dear Jeffrey and Chee,

Our entry price is indicated in the Open Positions table under the “Portfolio” link. Please refer to that in the future.

These indicator-based trades are based on how Steve’s indicator signals change, so at the time of the trade, we do not have a set holding period because it is not possible to predict how or when the indicator signals will change. As a general rule of thumb, we suggest a limit price no more than 5% to 10% above our entry price.

For the stock trades, we will usually indicate a target holding period.

Scott Chan

Scott Chan

Dear Ajax and Jeffrey,

This alert was posted on the website at 2:29 NY time. It was emailed out at about 3. However, I believe there’s a text alert service too. Let me check with customer service.

Steve has just closed out the position. There will be other opportunities.

Ajax

Ajax

There is a text alert service. I was signed up with Aggressive Trader, but I neglected to set up the Systematic Wealth text and email alerts when I learned of the merger of the two services.

Thanks for the reply!

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