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 - (HD) - TAKE PROFITS
SELL the Home Depot (HD)?September, 2018 $180-$185 in-the-money vertical BULL CALL spread at $4.20 or best
Closing Trade
8-15-2018
expiration date: September 21, 2018
Portfolio weighting: 10%
Number of Contracts = 24 contracts
We got the earnings I was looking for but not the stock move. This happens when markets are de-risking, and markets de-risk, I want to de-risk.
It didn't help that this is August, and the White House triggered the Turkey crisis by doubling tariffs out of the blue the day after we initiated this trade.
That sparked a global contagion that has already spread to India and Argentina.
If you own Home Depot shares outright sell them for the short term, but hold them for the long term.
Here are the specific trades you need to execute this position:
Sell 24 September 2018 (HD) $180 calls at......................$13.70
Buy to cover short 24 September 2018 (HD) $185 calls at....$9.50
Net Proceeds:.......................................................
Profit: $4.20 - $4.10 = $0.10
(24 X 100 X $0.10) = $240 or 2.43%.
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.
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.