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 - (FB) TAKE PROFITS
SELL the Facebook (FB) June, 2018 $130-$140 in-the-money vertical BULL CALL spread at $9.30 or best
Closing Trade
4-24-2018
expiration date: June 15, 2018
Portfolio weighting: 10%
Number of Contracts = 12 contracts
With Alphabet (GOOGL) taking a dive after their earnings as I expect, I'm afraid that the other FANG's will do the same. I am therefore cutting my technology position by half.
So I am taking profits in the Facebook (FB) June, 2018 $130-$140 in-the-money vertical BULL CALL spread at $9.30 or best.
If you are a short term trader sell the stock too. If you are a long term investor keep it. (FB) will eventually come out of its current problems stronger.
Here are the specific trades you need to execute this position:
Sell 12 June 2018 (FB) $130 calls at..........................$37.00
Buy to cover short 12 June 2018 (FB) $140 calls at....$27.70
Net Proceeds:............................................................$9.30
Potential Profit: $9.30 - $8.60 = $0.70
(12 X 100 X $0.70) = $840 or 8.13%.
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.
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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.