New Trade Alert Below Profit Summary and Track Record
SPY went from $302.09 to 303.21 or +$1.12
Collar went from +$0.12 to -$0.43 for = -$0.31
Net Profit = +$0.81/Share on 1700 shares or profit of $1,337 this weekend!
Key Macro: Trump predicted “markets would go up today” this morning and teased a phase one trade deal is “ahead of schedule”. Bond yields are rising as SPY500 jumps to new all-time highs. Wednesday I expect a 25 basis point cut and potentially an announcement of a 300-500B injection into the banks to ease “repo madness” money market lack of liquidity.
Impeachment by house is now expected to call a vote before Thanksgiving and passed to Senate before Christmas. This or a breakdown in the trade deal could derail our $315 SPY target in which case the TLT will generate large profits and our put options on the SPY kick-in to deliver profits.
Here is our current asset allocation recommendation:
The charts below illustrate the profit per month we’ve generated against the SP500 and what you’ll notice is that we rarely have a losing period no matter which direction stocks are headed.
Note the -7% return in May from the SPY ETF as we made a 2.2% return.
Again in August SPY ETF fall -7% and we deliver a 1.8% return.
New Trade Instructions
New Trade: Per 100 shares of SPY
(1) Buy to close Oct 28, 2019 $303 SPY Call, sell to close Oct 28, 2019 $301 SPY Put
(2) Sell to open Oct 30, 2019 $304 SPY Call, Buy to open Oct 30, 2019 $302 SPY Put.
Step 1. Close our previous trade if you took it otherwise skip to step 2.
Step 2. For every 100 shares of the SPY you own enter one of the following option contracts.
This is the maximum P/L we can achieve