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 - (JPM) – TAKE PROFITS
SELL the JP Morgan (JPM) May 2021 $135-$140 in-the-money vertical Bull Call spread at $4.98 or best
Trade Date: 5-10-2021
Expiration Date: May 21, 2021
Portfolio weighting: 10%
Number of Contracts = 24 contracts
The last week has seen a positively ballistic move in the banks, especially JP Morgan (JPM). With 97% of the maximum potential profit in hand, the risk reward of continuing is no longer favorable.
I’d rather have the extra cash to roll into a better position for the June expiration.
I am therefore selling the JP Morgan (JPM) May 2021 $135-$140 in-the-money vertical Bull Call spread at $4.98 or best.
By coming out here you get to take home $1,632, or 15.81% in 19 trading days. Well done and on to the next trade!
That has given us a gift. (JPM) is the class act in the global banking sector, and CEO Jamie Diamond is the best CEO in the country.
I believe that massive government borrowing, and spending will drive US interest rates up through the roof and the value of the US dollar (UUP) down. Banks love high interest rates because they vastly improve profit margins.
This was a bet that JP Morgan (JPM) will not fall below $140 by the May 21 option expiration day in 28 trading days.
Here are the specific trades you need to exit this position:
Sell 24 May 2021 (JPM) $135 calls at…………................………$33.00
Buy to cover short 24 May 2021 (JPM) $140 calls at………....$28.02
Net Proceeds:……………………............…….………..………….….....$4.98
Profit: $4.98 - $4.30 = $0.68
(24 X 100 X $0.68) = $1,632, or 15.81% in 19 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.
