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 - (FCX) – TAKE PROFITS
SELL the Freeport McMoRan (FCX) August $9-$10 vertical BULL CALL spread at $0.98 or best
Closing Trade
7-24-2019
expiration date: August 16, 2019
Portfolio weighting: 10%
Number of Contracts = 110 contracts
Freeport McMoRan (FCX) announced earnings today that were not as bad as expected, a loss of four cents a share instead of five cents, and the shares have gone ballistic, smashing through the 200-day moving average to the upside.
That has taken our position in the options through the roof.
I am therefore selling the Freeport McMoRan (FCX) August $9-$10 vertical BULL CALL spread at $0.98 or best.
At this price we have achieved 80% of the maximum potential profit in only four trading days. The risk/reward of continuing is no longer favorable.
If you can’t get my price, keep entering it every day until it is done. We are so far in-the-money, some $2.00 or 20%, that the risks of losing money are now miniscule. Run it into expiration if you have to get the full 100% profit.
By coming out here, you get to earn $880 or 8.00% in only 4 trading days. You also get to go 100% into cash in my model trading portfolio the day before the first read on the Q2 GDP is released, and four trading days before the Fed interest rate decision. It is the perfect risk management move.
With a series of US interest rate cuts coming closer by the day, I am casting a wider net for weak dollar plays and it is working. Gold has already run too much, but copper is looking very interesting with a major upside breakout underway on the charts.
If you own (FCX) shares outright keep them. There is a potential double in these shares from this level over the long term.
This was a bet that the (FCX) will not fall below $10.00 by the August 16 option expiration in 20 trading days.
There’s nothing like getting in on the ground floor of a raging bull market in commodities to get your juices flowing, even for a senior citizen.
I have a feeling that Freeport McMoRan is my new rich uncle, cutting me generous maintenance checks every month.
Here are the specific trades you need to execute this position:
SELL 110 August 2019 (FCX) $9 calls at………….…......……$3.00
BUY TO cover short 110 August 2019 (FCX) $10 calls at…$2.02
Net Proceeds:………………………….………..……….....….….....$0.98
Profit: $0.98 - $0.90 = $0.08
(110 X 100 X $0.08) = $880 or 8.00% in 4 trading days.
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.
You must be logged into your account to view the video.
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.
