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.
EXPIRATION of the JP Morgan (JPM) December 2020 $100-$105 in-the-money vertical Bull Call spread at $5.00
Closing Trade
12-18-2020
expiration date: December 20, 2020
Portfolio weighting: 10%
Number of Contracts = 24 contracts
This options call spread does not expire for one more day.
However, I have a record eight positions going into the Friday, December 18 option expiration so I am going to start closing these out early so as not to overload you, or my back office.
Provided that JP Morgan does not fall by $15.67 over the next day, the JP Morgan (JPM) December 2020 $100-$105 in-the-money vertical Bull Call spread will expire at $5.00.
As a result, you get to take home $1,200, or 11.11% in 23 trading days. Well done and on to the next trade.
You don’t have to do anything with this expiration.
Your broker (are they still called that?) 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 December 21 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
JP Morgan Chase is the class act among recovery and value plays, as the ballistic move in the stock over the past two weeks proved.
Even a small rise in interest rates can have a hugely positive influence on bank stocks.
I believe that impending massive government borrowing and spending will drive US rates up and the value of the US dollar down.
Covid-19 is rapidly approaching its third peak. Total US deaths could reach the 1919 Spanish Flu 625,000 peak by the time it is all over. One heck of a scare for the stock market is coming.
This was a bet that JP Morgan (JPM) would not fall below $105 by the December 18 option expiration day in 23 trading days.
Here is the specific accounting you need to exit this position:
EXPIRATION of 24 December 2020 (JPM) $100 calls at…...........$20.67
EXPIRATION of short 24 December 2020 (JPM) $105 calls at.....$15.67
Net Proceeds:……………………..………..………….........................….....$5.00
Profit: $5.00 - $4.50 = $0.50
(24 X 100 X $0.50) = $1,200, or 11.11% in 23 trading days.
