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) – SHORT
SELL SHORT the Freeport McMoRan (FCX) April $14.00 CALLS at $0.18 down to $0.10
Opening Trade
3-20-2019
expiration date: April 18, 2019
Portfolio weighting: 10%
Number of Contracts = 110 contracts
With interest rates worldwide falling off a cliff and all major central banks now looking to stimulate their economies, I believe the ”RISK ON’ environment will continue for both stocks AND bonds. This is how decade-low, liquidity-driven stock markets always end.
Fed government gave us a double dose of stimulus today. He indicated that there would be no more interest rate rises in 2019. He also said that the Fed balance sheet unwind would end at $2.7 trillion versus the zero that was expected only two months ago. The net effect is to inject another $2.7 trillion into the US economy.
Here is an opportunity to double the three-week profit on Freeport McMoRan (FCX) by selling short calls against our long call spread position.
Specifically, I am going to SELL SHORT the Freeport McMoRan (FCX) April 2019 $14.00 CALLS at $0.18 down or best.
Don’t sell the call options for less than $0.10 or the risk/rewards will turn against you.
This is a bet that (FCX) won’t rise above $14.00 by the April 18 option expiration in 18 days.
This will leave us LONG the Freeport McMoRan (FCX) April $10.00-$11.00 vertical bull call spread and SHORT the Freeport McMoRan (FCX) April $14.00 CALLS at $0.18.
Please note that I'm selling short only half the number of call options that I am long call spreads to keep us delta neutral and minimize the margin hit to your account.
Here is the specific trade you need to execute this position:
Sell short 110 April 2019 (FCX) $14.00 calls at…………$0.18
Potential Profit: $0.18 expires at zero
(110 X 100 X $0.18) = $1,980 or 20% in 17 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.
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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.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In today's market, investors need every advantage they can get.
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.
