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 - (C) – TAKE PROFITS
SELL the Citigroup (C) April 2023 $35-$40 in-the-money vertical Bull Call debit spread at $4.98
Closing Trade
4-17-2023
expiration date: April 21, 2023
Number of Contracts = 25 contracts
We have pretty much squeezed all the juice out of this lemon. I need to take profits here to make room for a new bond position. As I am currently 100% invested, I need to take profits on existing positions before I can establish a new one in these idyllic trading conditions.
I knew full well when the regional banking crisis first hit a month ago, stocks were wildly overreacting to the downside, especially those for large banks. That turned out to be the case, with billions of dollars of new deposits pouring into the safety of large bank balance sheets and de facto government guarantees.
I am therefore selling the Citigroup (C) April 2023 $35-$40 in-the-money vertical Bull Call debit spread at $4.98 or best.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and lower your offer by three cents with a second order.
As a result, you get to take home $1,700, or 16.00% in 19 days. Well done and on to the next trade!
If you can’t get a price you like, just hold on to the April 21 option expiration in four trading days.
To learn more about the company please visit their website at
https://www.citigroup.com/global
This was a bet that Citigroup would not fall below $40 by the April 21 option expiration in 24 days.
Here is the specific accounting you need to close out this position:
Sell 25 April 2023 (C) $35 calls at………….............………$14.40
Buy to cover short 25 April 2023 (C) $40 calls at…………$9.42
Net Proceeds:………….............……….…………….…….….....$4.98
Profit: $4.98 - $4.30 = $0.68
(25 X 100 X $0.68) = $1,700, or 16.00% in 19 days.
If you are uncertain about 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.
