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 - (GLD)- SELL-STOP LOSS
Sell the SPDR Gold Shares ETF (GLD) December, 2017 $116-$119 in-the-money vertical BULL CALL spread at $2.50 or best
Closing Trade-NOT FOR NEW SUBSCRIBERS
12-7-2017
expiration date: December 15, 2017
Portfolio weighting: 10%
Number of Contracts = 38 contracts
In this world of perpetual melt up in bitcoin and share prices there is no room for a hedge of any kind, especially with gold.
The barbarous relic may have a great January ahead of it when the stock seller's strike ends. But that is not now.
With only six trading days left until the December options expiration, we are getting perilously close to out upper $119 strike.
We are very close to breaking an uptrend line that stretches all the way back to 2016. The 200-day moving average is firmly in the rear view mirror.
The risk reward of continuing with this position is no longer favorable. Here is where risk control becomes the paramount priority.
I am therefore selling my position in the SPDR Gold Shares ETF (GLD) December, 2017 $116-$119 in-the-money vertical BULL CALL spread at $2.50 or best.
This is a small loss, so I will live to fight another day.
If you own (GLD) or the shares outright keep it. Stock Markets can't go up forever.
Here are the specific trades you need to execute this position:
Sell 38 December, 2017 (GLD) $116 calls at..........................................$3.00
Buy to cover short 38 December, 2017 (GLD) $119 calls at................$0.50
Net Proceeds:........................................................................................$2.50
loss: $2.50 - $2.65 = -$0.15
(38 X 100 X -$0.15) = -$570 or 5.66%.
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.
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.
