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 - (GS) STOP LOSS
Sell the Goldman Sachs (GS) April, 2018 $240-$245 in-the-money vertical BULL CALL spread at $3.45 or best
Closing Trade
3-28-2018
expiration date: April 20, 2018
Portfolio weighting: 10%
Number of Contracts = 23 contracts
The breakdown of the ten-year US Treasury bond yield below 2.80% definitely takes the bloom off the rose for all financial stocks.
It a small move, only five basis points. So, I am going to use the four dollar rally in Goldman Sachs position to unload my position and de risk the portfolio.
We are perilously close to the (SPY) 200-day moving average. If we break it, not matter how temporary, there could be a real market route.
I am therefore selling my position in the Goldman Sachs (GS) April, 2018 $240-$245 in-the-money vertical BULL CALL spread at $3.45 or best
Here are the specific trades you need to close this position:
Sell 23 April 2018 (GS) $240 calls at........................$12.20
Buy to cover short 23 April 2018 (GS) $245 calls at......$8.75
Net Proceeds:..............................................................$3.45
Loss: $4.20 - $3.45 = $0.75
(23 X 100 X $0.75) = $1,725 or 21.73%
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.