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 - (AMZN) – EXPIRATION AT MAX PROFIT
EXPIRATION of the Amazon (AMZN) February 2024 $130-$135 in-the-money vertical Bull Call spread at $5.00
Closing Trade
2-16-2024
expiration date: February 16, 2024
Portfolio weighting: 10%
Number of Contracts = 25 contracts
With this trade, we really nailed the ballistic melt-up in Amazon shares since January 9. This position is expiring at an eye-popping 23.97% in-the-money.
The batch of technology positions I went into with this week expired the most in-the-money in the 16-year history of the Mad Hedge Fund Trader. Now I think I’ll go buy something outrageously expensive on Amazon.
Just to be clear, this position does not expire until after the close today, February 16. I’m sending this expiration alert out early so I don’t overwhelm you with too many expirations at max profit this afternoon.
As a result, you get to take home $1,750 or 16.28% in 27 trading days. Well done and on to the next trade.
You don’t have to do anything with this expiration.
Your broker will automatically use your long position to cover your short position, canceling out the total holdings.
The entire profit will be credited to your account on Monday morning February 19 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
The flight of money right now is from small, undercapitalized, and questionable to large, overcapitalized, and rock solid.
I love Amazon for the long term.
In the AI world, data is king and nobody has more data than Amazon. It has perhaps tracked half of all the sales of everything in the US for the past decade. And if you want to do anything online, you have to execute through Amazon Web Services, the 800-pound gorilla of the hosting world (Mad Hedge does for cloud storage.)
As a result, Amazon along with NVIDIA should be among the top two big technology stocks in 2024. Look at the five-year chart below and it's clear that it should break out to a new all-time high this year. Oh, and if you break it up, as the US government would love to do, the company becomes worth twice as much in pieces.
This was a bet that Amazon would not fall below $135 by the February 16 option expiration.
Here is the specific accounting you need to close out this position:
EXPIRATION of 25 February 2024 (AMZN) $130 calls at…………$37.85
EXPIRATION of short 25 February 2024 (AMZN) $135 calls at…$32.85
Net Proceeds:………………………….………..………….….......................$5.00
Profit: $5.00 - $4.30 = $0.70
(25 X 100 X $0.70) = $1,750 or 16.28% in 27 trading days.
