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 - (IWM) – TAKE PROFITS
SELL the Russell 2000 (IWM) August 2019 $158-$161 in-the-money vertical BEAR PUT spread at $2.98 or best
Closing Trade
8-7-2019
expiration date: August 16, 2019
Portfolio weighting: 10%
Number of Contracts = 38 contracts
I am showing a $3.00 bid on my screen right now, so there is nothing left to earn from this position. I’ll give you $2.98 to get it done. The (IWM) has plunged a mind-blowing $10 since we strapped on this position only a couple of days ago.
I am therefore selling the Russell 2000 (IWM) August 2019 $158-$161 in-the-money vertical BEAR PUT spread at $2.98 or best
This was a bet that the Russell 2000 (IWM) will not trade above $158.00 by the August 16 option expiration day in 10 trading days.
If you don’t do options, stand aside. We are close to the top of a new range and it is too late to go long or short.
Here are the specific trades you need to exit this position:
Sell 38 August 2019 (IWM) $161 puts at………….…….........…$13.40
Buy to cover short 38 August 2019 (IWM) $158 puts at…….$10.42
Net Proceeds:………………………….………..………….…...............$2.98
Profit: $2.98 - $2.60 = $0.38
(38 X 100 X $0.38) = $1,444 or 14.61% in 4 trading days.
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.
