Trade Alert – (SPY) May 15, 2025 – BUY

When John identifies a strategic exit point, he will send you an alert with specific trade information on what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.

 

Trade Alert – (SPY) – BUY

Buy the S&P 500 (SPY) June 2025 $650-$660 in-the-money vertical bear put debit spread at $8.50 or best

 

Opening Trade

5-15-2025

expiration date: June 20, 2025

Portfolio weighting: 10% weighting

Number of Contracts = 12 contracts

The market has just seen one of the sharpest moves up in History.

The Mad Hedge Market Timing Index has just exploded from 2 to 70 in a little more than a month.

The global economic outlook is as daunting as ever. It’s just a matter of how long it takes the negative numbers to show up.

This is a bet that the stock market does not hit a new all-time high in the next 25 trading days, a period of time when the market usually tops out. Sounds like a no-brainer, doesn’t it? Heard of “Sell in May and Go Away?”

The truly disappointing thing about the recent rally is that it has made stocks expensive once again. In valuation terms, we are now back at February’s peak earnings multiple of 22X for the S&P 500, up from 18X a month ago. This is happening because the growth rate of earnings is falling while share prices are rising.

We are now facing record-high share prices in an economy going into a recession, DOGE cutting chunks of government spending, with rising unemployment and inflation, and a budget deficit for 2025 that is likely to hit $4-$5 trillion.

It doesn’t sound like a great bargain to me. Maybe that’s why only 26% of investors are currently bullish.

Therefore, I am buying the S&P 500 (SPY) June 2025 $650-$660 in-the-money vertical bear put debit spread at $8.50 or best.

DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.

Do not pay more than $9.00, or you will be chasing

Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and increase your bid by 10 cents with a second order.

If you don’t want to sit in front of a screen all day or you live in a foreign time zone when the US stock market is closed, such as Australia, or don’t want to sit in front of a screen all day, simply enter a spread of Good-Until-Cancelled orders overnight, like $8.50, $8.60, $8.70, and $8.80. You should get done on some or all of these.

This is a bet that S&P 500 (SPY) will not trade above $650 in 25 trading days.

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

Buy 12 June 2025 (SPY) $660 puts at………………..$72.00

Sell short June 2025 (SPY) $650 puts at……………$63.50

Net cost:……………………………………………………….…$8.50

Potential Profit: $10.00 – $8.50 = $1.50

(12 X 100 X $1.50) = $1,800 or 17.65% in 25 trading days

 

 

 

 

If you are uncertain about how to execute an options spread, please watch my training video by clicking here.

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 on expiration months farther out.

Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.