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.
Trade Alert - (IWM) – EXPIRATION
EXPIRATION of the Russell 2000 (IWM) October 2019 $137-$142 in-the-money vertical Bull call spread at $5.00
Closing Trade
10-18-2019
expiration date: October 18, 2019
Portfolio weighting: 10%
Number of Contracts = 22 contracts
The Russell 2000 (IWM) October 2019 $137-$152 in-the-money vertical bull call spread is about to expire at its maximum value of $5.00. My bet that the Russell 2000 would bounce hard near its low for the year and into the run up to a China trade deal, be it real or fake, proved accurate.
As a result, you get to earn $1,210 or 12.46% in 13 trading days.
You don’t need to do anything. The margin should be freed up and the profit deposited in your account on Monday morning.
This was a very short-dated option bet that assumed we wouldn’t see a major stock market collapse during the next 13 days.
Also, with ultra-low interest rates and foreign capital pouring into America driving up the US dollar, I don’t believe the downside risk in the market is more than 10%. The (IWM) has just done a 6.3% swan dive. Our upper strike price of $142 was below the 2019 low.
This was a bet that the Russell 2000 (IWM) would not trade below $142.00 by the October 18 option expiration day in 13 trading days.
Here are the specific trades in this position:
Expiration of 22 October 2019 (IWM) $137 calls at.….....…$15.36
Expiration of short 22 October2019 (IWM) $142 calls at….$10.36
Net Proceeds:………….........……………….………..………….….....$5.00
Profit: $5.00 - $4.45 = $0.55
(22 X 100 X $0.55) = $1,210 or 12.46% in 13 trading days.
