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) – EXPIRATION AT MAX PROFIT
EXPIRATION of the Goldman Sachs (GS) October 2021 $320-$330 vertical bull call spread at $10.00
Closing Trade - NOT FOR NEW SUBSCRIBERS, YOUR TURN WILL COME
10-14-2021
expiration date: October 15, 2021
Portfolio weighting: 10%
Number of Contracts = 12 contracts
I am going to run the P&L on this position, so I don’t overwhelm you, and my staff, with seven closing trade alerts tomorrow. My bet that interest rates would soar taking financial stocks with them has proven wildly successful. That has left us with a record seven positions that expire at max profit on Friday.
Goldman Sachs is expected to announce blockbuster earnings tomorrow. I think it is therefore safe to call this position a win, even though the actual October 15 options expiration is not until tomorrow.
Financials typically sell off on earnings announcements, but we are so far in the money that we have an ample cushion going into expiration.
Since we added this position, shares of the Goldman Sachs (GS) have rocketed by $30.00. That is miles away from the nearest $330.00 strike price for this position.
It also helped that we caught the top of the move in the Volatility Index (VIX) at a $25-$29 top when we added this position. Today the (VIX) is only at $18.
Therefore, we get to take home the maximum profit in this position, such is the magic of vertical bull call debit spreads. That means you get to take home $1,650, or 17.64% in 19 trading days.
The wall of money is still there, and in fact, it is growing.
Well done and on to the next trade!
You don’t have to do anything with this expiration.
Your broker will automatically use your long position to cover your short position, canceling out the total holdings.
The entire profit will be credited to your account on Monday morning, October 18 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
I am making a fortune in the stock market.
You are making a fortune in the stock market.
Goldman Sachs is making a fortune in the stock market.
That makes me want to buy Goldman Sachs, which is profiting immensely off of the current bull market.
The Volatility Index at $28.00 also gives us another “BUY” signal. My Mad Hedge Market Timing Index is at a rare 19.
I am therefore buying the Goldman Sachs (GS) October $320-$330 vertical bull call spread at $8.50 or best.
This was a bet that Goldman would not trade below $330 by the October 15 option expiration day in 19 trading days.
Here is the accounting you need to close out this position:
EXPIRATION of 11 October 2021 (GS) $320 calls at………….……...…$66.31
EXPIRATION of short 11 October 2021(GS) $330 calls at……….......$56.31
Net Proceeds:………..…….………..………….………...............................$10.00
Profit: $10.00 - $8.50 = $1.50
(11 X 100 X $1.50) = $1,650 or 17.64% in 19 trading days.
