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 - MicroStrategy Incorporated (MSTR) – STOP LOSS
SELL the MicroStrategy Incorporated (MSTR) March 2022 $335-$385 in-the-money vertical Bull Call spread at $39.00
Closing Trade
3-7-2022
expiration date: March 18, 2022
Number of Contracts = 2 contract
MicroStrategy Incorporated (MSTR) is the publicly accepted proxy for the price of bitcoin and you can play this in the equity market.
I thought MSTR momentum would have upside because of crypto buying for the kinetic war.
But as risk assets have sold off, it has also dragged crypto down as well.
Luckily, we bought the call spread at cheap prices because of the elevated implied volatility.
The setup for BTC is extremely poor as investors have shunned the digital gold in what could turn out to be the beginning of a world war.
We will aim to sell the BTC rallies as BTC will have a hard time outperforming in 2022.
Here are the specific trades you need to exit this position:
Sell to Close 2 March 2022 (MSTR) $335 calls at….…….…$71.00
Buy to Close 2 March 2022 (MSTR) $385 calls at………....$32.00
Net Proceeds:……………………..…….………..………...............$39.00
Loss: $40 - $39 = $1.00
(2 X 100 X $1) = $200 or 2.5%
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.
