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 - (CCI) – TAKE PROFITS
SELL the Crown Castle International (CCI) August 2024 $90-$95 vertical BULL CALL debit spread at $4.98 or best
Closing Trade – NOT FOR NEW SUBSCRIBERS
7-25-2024
expiration date: August 16, 2024
Portfolio weighting: 10%
Number of Contracts = 25 contracts
My bet that interest rate plays and REITS were about to take off big time proved spot on. As a result, we are just short of maximum profit for our (CCI) position.
The risk/reward of continuing until the August 16 option expiration is no longer favorable. Always leave the last few pennies of a trade for the next guy
In addition with a stock market meltdown underway and the Volatility Index ($VIX) approaching new highs for the year, a boatload of new trades are presenting themselves. Dry powder is now worth more than it usually is.
Therefore, I am selling the Crown Castle International (CCI) August 2024 $90-$95 vertical BULL CALL debit spread at $4.98 or best.
As a result, you get to take home $1,950 or 18.57% in just 10 trading days. Well done and on to the next trade.
The writing is not only on the wall right now, it’s blasting us with great neon lights. That was the message from the Consumer Price Index, which delivered a gob-smacking 0.1% DECLINE in June.
As a result, a Fed interest rate cut of 25 basis points is now a certainty and all falling interest rate plays in the stock market are in play. Rising rate plays and flat technology could be the trade for the rest of 2024.
It is all very positive for big borrowers like (CCI).
This is all on top of a major rotation in the market underway, out of technology stocks that have been leading all year into interest rate stocks. We have already seen major upside breakouts in gold and silver.
If you can’t do options, buy the stock. My long-term target for (CCI) is $150, up nearly 50% from today’s $101.
The bull case for Crown Castle International is simple. Falling interest rates will bring huge cost reductions for heavy borrowers like (CCI), a REIT (Real Estate Investment Trust) which builds 5G cell phone towers. It is highly sensitive to any move in interest rates. It also has an incredibly generous 6.62% dividend yield and is effectively a quasi-bond.
For details about Crown Castle International (CCI), please click here for their website.
This was a bet that (CCI) would not fall below $95 by the August 16 option expiration in 26 trading days.
Here are the specific trades you need to close out this position:
Sell 25 August 2024 (CCI) $90 calls at………….…......….…$16.00
Buy to cover short 25 August 2024 (CCI) $95 calls at……$11.02
Net Proceeds:………………………….………...……...........….....$4.98
Profit: $4.98 - $4.20 = $0.78
(25 X 100 X $0.78) = $1,950 or 18.57% in 10 trading 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.
