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) April 2019 $10-$11 vertical BULL CALL spread at $0.98 or best
Closing Trade
3-29-2019
expiration date: April 18, 2019
Portfolio weighting: 20%
Number of Contracts = 220 contracts
My bet that commodity stocks would outperform the main market over the last three weeks. While the market has churned, (FCX) shares have slowly ground upward. More importantly, we captured a huge amount of time decay with this options position. We now have 80% of the maximum potential profit.
Therefore, I am selling the Freeport McMoRan (FCX) April 2019 $10-$11 vertical BULL CALL spread at $0.98 or best. If you get nothing done at this price, then lower your offer by a penny.
If you bought the (FCX) shares outright, keep them. There is a potential double in these shares from this level for the long term.
This was a bet that the (FCX) will not fall below $11.00 by the April 18 option expiration in 32 trading days. With ten days to run this risk/reward of continuing with this trade is no longer favorable.
I picked this stock because I believe that current US economic and monetary policies are designed to cut the knees out from under the US dollar. That is great news for weak dollar plays, especially commodities. Look no further than the price of oil which has also been on a tear.
This is why I picked up a rare double position in Freeport McMoRan.
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.
Here are the specific trades you need to exit this position:
Sell 220 April 2019 (FCX) $10 calls at……............…….………$2.80
Buy to cover short 220 April 2019 (FCX) $11 calls at…………$1.82
Net Cost:………………………….………..……................…….….....$0.98
Profit: $0.98 - $0.90 = $0.08
(220 X 100 X $0.08) = $2,200 or 8.88% in 22 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.
