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 - (FB) – TAKE PROFITS
SELL the Facebook (FB) March 2020 $190-$200 in-the-money vertical Bear Put spread at $9.80 or best
Closing Trade - NOT FOR NEW SUBSCRIBERS
3-11-2020
expiration date: March 20, 2020
Portfolio weighting: 10%
Number of Contracts = 11 contracts
You don’t get to capture 83% of the maximum profit in a short position very often. Facebook shares are down $10 from when I slapped on this position. So I am going to seize this opportunity.
The World Health Organization (WHO) has just declared a global pandemic. Better late than never. It’s the best time ever to cover a short position
So, I am going to use resulting 1,400-point crash in the Dow Average to cover my last short position.
I am therefore selling the Facebook (FB) March 2020 $190-$200 in-the-money vertical Bear Put spread at $9.80 or best.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Here are the specific trades you need to exit this position:
Sell 11 March 2020 (FB) $200 puts at…….....…….……........…$32.00
Buy to cover short 11 March 2020 (FB) $190 puts at….........$22.20
Net Proceeds:………........……………..…….………..………….…......$9.80
Profit: $9.80 - $8.80 = $1.00
(11 X 100 X $1.00) = $1,100 or 11.36% in 1 trading day
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.
