When John identifies a strategic exit point, he will send you an alert with specific trade information as to 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.
TAKE PROFITS
SELL the S&P 500 (SPY) December 2018 $240-$250 in-the-money vertical BULL CALL spread at $9.20 or best
Closing Trade – NOT FOR NEW SUBSCRIBERS
12-19-2018
expiration date: December 21, 2018
Portfolio weighting: 10%
Number of Contracts = 11 contracts
With the extreme volatility we are seeing today I am going to cut my risk in the December 21 options. Bailing for a small profit when you hit your upper strike has been a winning strategy in this kind of market.
I am therefore selling the S&P 500 (SPY) December 2018 $240-$250 in-the-money vertical BULL CALL spread at $9.20 or best.
This was a bet that the S&P 500 (SPY) would not trade below $250 by the December 21 option expiration day in 15 trading days. It is also a bet that the (SPY) will NOT drop below the February $250 low.
Here are the specific trades you need to execute this position:
SELL 11 December 2018 (SPY) $240 calls at………….………$11.50
Buy to cover short 11 December 2018 (SPY) $250 calls at…...$2.30
Net Proceeds:………………………….………..……………..….....$9.20
Profit: $9.20 - $9.00 = $0.20
(11 X 100 X $0.20) = $220, or 2.2% in 9 trading days.
To see how to enter this trade in your online platform, please look at the order ticket above, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video on How to Execute Vertical Call and Put Debit Spreads by clicking here.
You must be logged in to your account to view the video.
Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In today's market, investors need every advantage they can get.
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 close to expiration.
If you don't get done, don't worry. There are another 250 Trade Alerts coming at you over the coming 12 months.
