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 - (AMZN) – EXPIRATION AT MAX PROFIT
EXPIRATION of the Amazon (AMZN) March 2024 $155-$160 in-the-money vertical Bull Call spread at $5.00
Closing Trade
3-15-2024
expiration date: March 15, 2024
Portfolio weighting: 10%
Number of Contracts = 25 contracts
With this trade, we really nailed the ballistic meltup in Amazon shares since January 8. This position is expiring at an eye-popping 14.84% in the money.
Just to be clear, this position does not expire until after the close today, Friday, March 15.
As a result, you get to take home $1,250 or 11.11% in 16 trading days. Well done and on to the next trade.
You don’t have to do anything with this expiration.
Your broker will automatically use your long position to cover your short position, canceling out the total holdings.
The entire profit will be credited to your account on Monday morning, March 18 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
The flight of money right now is from small, undercapitalized, and questionable to large, overcapitalized, and rock solid.
With all of the hubbub over NVIDIA, few have noticed that Amazon has joined the Dow Average, taking the place of the Walgreen Boots Alliance (WBA). Stocks ALWAYS go up when they are added to a major index like the Dow because it triggers a large amount of index buying.
Amazon's entry into the Dow Jones Industrial Average was enabled by a 20-for-one stock split in 2022 that made its stock price sufficiently low for it to be included in the price-weighted index. Out with the old retailer, in with the new.
I love Amazon for the long term.
In the AI world data is king and nobody has more data than Amazon. It has perhaps tracked half of all the sales of everything in the US for the past decade. And if you want to do anything online you have to execute through Amazon Web Services, the 800-pound gorilla of the hosting world (Mad Hedge does for cloud storage.)
As a result, Amazon along with NVIDIA should be among the top two big technology stocks in 2024. Look at the five-year chart below and its clear that it should break out to a new all-time high this year. Oh, and if you break it up, as the US government would love to do, the company becomes worth twice as much in pieces.
This was a bet that Amazon would not fall below $160 by the March 15 option expiration in 16 trading days.
Here is the specific accounting you need to close out this position:
EXPIRATION of 25 March 2024 (AMZN) $155 calls at…………..…$23.30
EXPIRATION of short 25 March 2024 (AMZN) $160 calls a………$18.30
Net Proceeds:………………………….………..………….…........................$5.00
Profit: $5.00 - $4.50 = $0.50
(25 X 100 X $0.50) = $1,250 or 11.11% in 16 trading days.
