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 - (DIS) – EXPIRATION AT MAX PROFIT
EXPIRATION of the Walt Disney Corp. (DIS) March 2021 $170-$180 in-the-money vertical Bull Call spread at $10.00
Closing Trade – NOT FOR NEW SUBSCRIBERS, YOUR TURN WILL COME
3-18-2021
expiration date: March 19, 2021
Portfolio weighting: 10%
Number of Contracts = 12 contracts
Days after we initiated this position, the State of California announced that it would allow Disneyland to reopen in Southern California. The stock went through the roof.
The harder I work, the luckier I get.
Although this position does not expire until tomorrow, I think it’s safe to call it a win. Therefore, you will get to take home $1,080 or 9.89% in 14 trading days.
You don’t have to do anything with this expiration.
Your broker (are they still called that?) will automatically use your long position to cover your short position, canceling out the total holdings.
The entire profit will be credited to your account on Monday morning, March 22 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
As cloudy as the near-term outlook is for Walt Disney, I love it for the long term. It is the perfect end of the pandemic play, with huge exposure to their theme parkers, hotels, and cruise line worldwide.
So do a ton of other portfolio managers who are willing to take some short-term heat in order to get into one of the best managed companies in America with some of the greatest digital assets.
This was a bet that Walt Disney shares would NOT fall below $180 by the March 19 option expiration date in 14 trading days.
Here are the specific actions that take place to exit this position:
EXPIRATION of 12 March 2021 (DIS) $170 calls at……....……$26.93
EXPIRATION of short 12 March 2021 (DIS) $180 calls at…….$16.93
Net Proceeds:………………………..…...................…………..….....$10.00
Profit: $10.00 - $9.10 = $0.90
(12 X 100 X $0.90) = $1,080 or 9.89% in 14 trading days.
