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) – BUY
BUY the Citigroup (C) December 2024 $60-$65 in-the-money vertical Bull Call debit spread at $4.35 or best
Opening Trade
11-13-2024
expiration date: December 20, 2024
Number of Contracts = 25 contracts
Citigroup’s blockbuster earnings report has blasted the stock to a new all-time high, dragging the rest of the financial sector with it. It is also a major beneficiary of the new post-election deregulation trend and massive stimulation of the economy.
Financials are back!
Increasingly, investors don’t want to be left behind by the monster post-election rally. The October selloff was only a 4.5% drawdown at the beginning of the month.
(C) is one of the top commercial banks in the US, with a market capitalization of $598 billion. They are one of the most profitable banks and pay a generous 3.12% dividend yield. Yet they sport a price-earnings multiple of only 19X versus 22X for the S&P 500. They have, far and away, one of the most sophisticated and conservative risk control procedures out there.
The Fed will certainly cut interest rates by 25 basis this December because it is already in the mail. I did a LEAPS on (JPM) last year, and followers earned a handy 100% return in nine months. I like returning to wells that refresh me.
I am therefore buying the Citigroup (C) December 2024 $60-$65 in-the-money vertical Bull Call debit spread at $4.35 or best.
Don’t pay more than $4.60 or you’ll be chasing on a risk/reward basis.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES. Just enter a limit order and work it.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and increase your bid by 10 cents with a second order.
If you live in a foreign time zone when the US stock market is closed, such as Australia, or don’t want to sit in front of a screen all day, simply enter a spread of Good-Until-Cancelled orders overnight, like $4.35, $4.40, $4.45, and $4.50. You should get done on some or all of these.
To learn more about the company, please visit their website at https://www.citigroup.com/global
This is a bet that Citigroup will not fall below $65 by the December 20 option expiration in 24 days.
Here are the specific trades you need to execute this position:
Buy 25 December 2024 (C) $60 calls at………….………$10.00
Sell short 25 December 2024 (C) $65 calls at……….…$5.65
Net Cost:………………………….…….…............................$4.35
Potential Profit: $5.00 - $4.35 = $0.65
(25 X 100 X $0.65) = $1,625 or 14.94% in 24 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.
