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) – TAKE PROFITS
SELL the SPDR Gold Shares ETF (GLD) May 2022 $165-$170 in-the-money vertical Bull Call spread at $4.60 or best
Closing Trade
5-6-2022
expiration date: May 20, 2022
Portfolio weighting: 10%
Number of Contracts = 24 contracts
With markets breaking down on another “sell everything” day, I am going to de-risk my book and take profits where I can.
I am therefore selling the SPDR Gold Shares ETF (GLD) May 2022 $165-$170 in-the-money vertical Bull Call spread at $4.60 or best
Buy coming out here, you get to take home $720, or 6.98% in 7 trading days. Well done, and on to the next trade.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and lower your offer by 10 cents with a second order.
This was a bet that the SPDR Gold Shares ETF would not fall below $170 by the May 20 options expiration day in 7 trading days. For more about (GLD) please click here for their website at https://www.spdrgoldshares.com
Here are the specific trades you need to close out this position:
Sell 11 May (GLD) $165 calls at………….…................……$11.00
Buy to cover short 11 May (GLD) $170 calls at…………....$6.40
Net Proceeds:……………………..............…….………….….....$4.60
Profit: $4.60 - $4.30 = $0.30
(24 X 100 X $0.30) = $720, or 6.98% in 7 trading days.
If you are uncertain about how to execute an options spread, please watch my training video by clicking here.
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 on expiration months farther out.
Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.
