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) June, 2018 $60-$65 in-the-money vertical bull call spread at $4.30 or best
Closing Trade
4-25-2018
expiration date: June 15, 2018
Portfolio weighting: 10%
Number of Contracts = 23 contracts
When you throw good news on a stock and it fails to rise, you get out of Dodge.
You can't imagine any better news for Citigroup than the sharply rising rates of the past week and a blowout Q1 earnings report. Yet the shares are sitting here, right where they were two weeks ago.
Obviously a grim macro market picture is overwhelming any fundamentals unique to Citigroup.
So, I am selling my position in the Citigroup (C) June, 2018 $60-$65 in-the-money vertical bull call spread at $4.30 or best.
By running to the sidelines here I get to earn a $115, or 1.18% profit in 11 trading days and raise some valuable cash. A long June duration is not the position to have during a major market meltdown.Better to live to fight another day. We have A LOT of performance to protect.
This was a bet that (C) will not trade below $65.00 by the June 15 option expiration in 49 trading days.
Here are the specific trades you need to exit this position:
Sell 23 June 2018 (C) $60 calls at....................$8.75
Buy to cover short 23 June 2018 (C) $65 calls at....$4.45
Net proceeds:.....................................................$4.30
Profit: $4.30 - $4.25 = $0.05
(23 X 100 X $0.05) = $115 or 1.18% 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.