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 - (JPM) TAKE PROFITS
SELL JP Morgan (JPM) April, 2018 $95-$100 in-the-money vertical bull call spread at $4.98
Closed-NOT FOR NEW SUBSCRIBERS
4-16-2018
expiration date: April 20, 2018
Portfolio weighting: 10%
Number of Contracts = 22 contracts
This was a bet that (JPM) would not trade below $100 by the April 20 option expiration in 12 trading days.
With only three trading days left until the April 20 expiration date and being a comfortable $10.96 in-the-money we have captured 95.96% of the maximum potential profit in this position.
So, I am going to sell my position in the JP Morgan (JPM) April, 2018 $95-$100 in-the-money vertical bull call spread at $4.98 or best.
We got an assist from plunging bond prices and soaring years, which saw the ten year US treasury yield jump from 2.72% to 2.86%.
Also helping the positions has been a US dollar in freefall today, again thanks to rocketing US deficits.
The heavy hand of exploding government budget befits is making itself felt. Banks absolutely love rising interest rates as they fall straight to the bottom line.
Well done for you. You made a quickie 9.45% profit, or $946 profit in only nine trading days during a time when traders were seating bullets and wringing their hands.
Here are the specific entries you need to close out this position:
Sell of 22 April 2018 (JPM) $95 calls at.......................$20.50
Buy to Cover of short 22 April 2018 (JPM) $100 calls at...$15.52
Net Proceeds:.................................................................$4.98
Profit: $4.98 - $4.55 = $0.43
(22 X 100 X $0.43) = $946 or 9.45% in 9 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.
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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.