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 – (IBKR) – STOP LOSS
SELL the Interactive Brokers (IBKR) March 2025 $160-$170 in-the-money vertical Bull Call debit spread at $7.70 or best
Closing Trade
3-11-2025
expiration date: March 21, 2025
Number of Contracts = 12 contracts
I am going to use the modest $3 rally in (IBKR) this morning to de-risk, de-gross, and free up cash. The fact that financials are leading the downturn, despite business being great, means that we are already in a recession.
I am exercising more than the usual amount of risk control in these conditions, so I am stopping out with a small loss, even though we are still $10 away from our nearest strike price.
I am therefore selling the Interactive Brokers (IBKR) March 2025 $160-$170 in-the-money vertical Bull Call debit spread at $7.70 or best.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES. Just enter a limit order and work it.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and lower your offer by 10 cents with a second order.
If you live in a foreign time zone when the US stock market is closed, such as Australia, or don’t want to sit in front of a screen all day, simply enter a spread of Good-Until-Cancelled orders overnight, like $7.70, $7.60, $7.50, $7.40, and $7.30. You should get done on some or all of these.
To learn more about the company, please visit their website at https://www.interactivebrokers.com/
This was a bet that Interactive Brokers would not fall below $170 by the March 21 option expiration in 17 days.
Here are the specific trades you need to exit this position:
Sell 12 March 2025 (IBKR) $160 calls at………….……...........…$14.00
Buy to cover short 12 March 2025 (IBKR) $170 calls at…………$6.30
Net Proceeds:………………………….…….……................................$7.70
Loss: $9.00 - $7.70 = -$1.30
(12 X 100 X $1.30) = -$1,560
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.
