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 - (TLT) ??? TAKE PROFITS
SELL the iShares Barclays 20+ Year Treasury Bond Fund (TLT) February, 2018 $114-$117 in-the-money vertical BULL CALL spread at $2.80 or best
Closing Trade
2-14-2018
expiration date: February 16, 2018
Portfolio weighting: 10%
Number of Contracts = 37 contracts
Thanks to the red hot increase in the Consumer Price Index this morning, bond prices have broken down to a new four year low.
I am therefore going to take profits here in my long position with the iShares Barclays 20+ Year Treasury Bond Fund (TLT) February, 2018 $114-$117 in-the-money vertical BULL CALL spread.
I am leaving some money on the table here coming out of my position two days before expiration.
Coming out here you still get to take home a modest profit of 3.70% in only seven trading days.
However, risk control is the order of the day, and a small profit is much better than a big loss if this (TLT) melt down really starts to gain a head of steam.
Here are the specific trades you need to exit this position:
Sell 37 February, 2018 (TLT) $114 calls at????????????.?????????$3.80
Buy to cover short 37 February, 2018 (TLT) $117 calls at???.$1.00
Net Cost:??????????????????????????????.????????????..????????????.???.....$2.80
Profit: $2.80 - $2.70 = $0.10
(37 X 100 X $0.10) = $370 or 3.70% in 7 trading days.
To see how to enter this trade in your online platform, please look at the order ticket above, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video on How to Execute Vertical Call and Put Debit Spreads by clicking here.
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Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In today's market, investors need every advantage they can get.
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 close to expiration.
If you don't get done, don't worry. There are another 250 Trade Alerts coming at you over the coming 12 months.
