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.
Tech Trade Alert - (MSFT) – TAKE PROFITS
SELL the Microsoft (MSFT) September, 2018 $102-$105 in-the-money vertical BULL CALL spread at $2.98 or best
Closing Trade
9-13-2018
expiration date: September 21, 2018
Portfolio weighting: 10%
Number of Contracts = 37 contracts
I’ll take the win here on Microsoft. The spread trading at $3.00 and there are only five trading days left until the September 21 option expirations.
I am therefore selling the Microsoft (MSFT) September, 2018 $102-$105 in-the-money vertical BULL CALL spread at $2.98 or best.
By coming out here you made an admirable profit of 10.37% or $1,037 in only 11 trading days. And you have pulled this off despite a general malaise in the technology area.
If you bought Microsoft shares outright keep them. They are going to new all-time highs.
Well done and on to the next trade.
Here are the specific trades you need to execute this position:
SELL 37 September 2018 (MSFT) $102 calls at……………$11.50
Buy to cover short 37 September 2018 (MSFT) $105 calls at….$8.52
Net Proceeds:………………………….…………..…….…
Profit: $2.98 - $2.70 = $0.28
(37 X 100 X $0.28) = $1,036 or 10.37% in 11 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.
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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.