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) –STOP LOSS
SELL the Citigroup (C) September 2020 $45-$48 in-the-money vertical Bull Call spread at $2.40 or best
Closing Trade – NOT FOR NEW SUBSCRIBERS
9-14-2020
expiration date: September 18, 2020
Portfolio weighting: 10%
Number of Contracts = 38 contracts
Citigroup just announced a surprise $900 million loss due to an “operational error”. I am not going to wait for the details, and with only four days until the September 18 option exportation I am going to minimize my lost
Click here for the news.
I am not going to wait to find out and am bailing for a small loss to minimize my risk.
I am therefore selling the Citigroup (C) September 2020 $45-$48 in-the-money vertical Bull Call spread at $2.40 or best.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
This was a bet that Citigroup (C) would not trade below $48 by the September 18 option expiration day in 8 trading days.
Here are the specific trades you need to enter this position:
Sell 38 September 2020 (C) $45 calls at……..........…….………$3.70
Buy to cover short 38 September 2020 (C) $48 calls at….…..$1.30
Net Cost:……………...............………..…….………..………….….....$2.40
Loss: $2.60 - $2.40 = $0.20
(38 X 100 X $0.20) = $760, or 8.3%.
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 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.
