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 - (JPM) – TAKE PROFITS
SELL the JP Morgan Chase (JPM) April 2023 $105-$115 in-the-money vertical Bull Call debit spread at $9.95 or best
Closing Trade
4-14-2023
expiration date: April 21, 2023
Number of Contracts = 12 contracts
This morning, JP Morgan announced blockbuster earnings, taking the stock up a ballistic $11, or 8.6% (click here at ). Revenues came in at $39.34 billion versus an expected $36.19 billion. Adjusted EPS were $4.32 a share versus an expected $3.41. It is the biggest gap up in share prices in 20 years.
As a result, we are just short of the maximum profit in this position, with the shares up an eye-popping 21% from the nearest strike price.
As I want to remain 100% fully invested in these idyllic trading conditions, I have to take a profit on an existing position in order to add a new one. I can always take a nap this summer.
I dove into this position at the absolute height of the regional banking crisis on March 13. The crash in (JPM) share made no sense as the crisis drove to them billions of dollars in new deposits in a search for the safety of a large balance sheet.
I took advantage of the Silicon Valley Bank crisis to dive in on JP Morgan (JPM), which has cratered 11% in a week. As far as I can tell, the only connection (JPM) had with Silicon Valley Bank is that they are both in the United States. They didn’t even have any deposits there at (SVB).
It helps also that the Volatility Index ($VIX) rocketed to $31 and a Mad Hedge Market Timing Index that just plunged to only 17. The (VIX) is now at $18.
I am therefore selling the JP Morgan Chase (JPM) April 2023 $105-$115 in-the-money vertical Bull Call debit spread at $9.95 or best.
As a result, you get to take home $1,740, or 17.06% in 19 trading days. Well done and on to the next trade.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES. Just enter a limit order and work it.
To learn more about the company please visit their website at
https://www.jpmorganchase.com
This was a bet that JP Morgan Chase (JPM) would not fall below $115 by the April 21 option expiration in 24 days.
Here are the specific trades you need to close out this position:
Sell 12 April 2023 (JPM) $105 calls at………….……............…$34.00
Buy to cover short 12 April 2023 (JPM) $115 calls at…………$24.05
Net Proceeds:………………………….….......................……..….....$9.95
Profit: $9.95 - $8.50 = $1.45
(12 X 100 X $1.45) = $1,740, or 17.06% in 19 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.
