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 - (SPY) – TAKE PROFITS
SELL the S&P 500 (SPY) March 2021 $405-$410 in-the-money vertical BEAR PUT spread at $4.97 or best
Closing Trade – NOT FOR NEW SUBSCRIBERS – YOUR TURN WILL COME
3-5-2021
expiration date: March 19, 2021
Portfolio weighting: 10%
Number of Contracts = 24 contracts
I am inclined to take big profits in only three days.
I added this position yesterday to hedge our existing long positions. It worked immediately. There is no benefit left to keeping this position. It is better to free up the cash and roll it into a new position, of which there are many.
In addition, short positions in massive liquidity-driven markets must be short-term, brief, and fleeting affairs. The slightest headline could send stocks screaming once again. The number of trillions of dollars soon to enter the market cannot be counted on all your fingers and toes.
I am therefore selling the S&P 500 (SPY) March 2021 $405-$410 in-the-money vertical BEAR PUT spread at $4.97 or best. By coming out here, you get to take home $1,128, or 10.44% in only 3 trading days.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
This was a bet that the S&P 500 (SPY) would not trade above $405.00 by the March 19 option expiration day in 13 trading days.
Here are the specific trades you need to exit this position:
Sell 24 March 2021 (SPY) $410 puts at……….....….………$37.00
Buy to cover short 24 March 2021 (SPY) $405 puts at….$32.03
Net Proceeds:………………………….…......……..………….….....$4.97
Profit: $4.97 - $4.50 = $0.47
(24 X 100 X $0.47) = $1,128 or 10.44% in 3 trading days.
If you are uncertain on 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.
