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) August 2024 $190-$195 in-the-money vertical Bull Call spread at $4.95 or best.
Closing Trade – NOT FOR NEW SUBSCRIBERS
7-25-2024
expiration date: August 16, 2024
Portfolio weighting: 10%
Number of Contracts = 25 contracts
My bet that interest rate plays and financials were about to take off big time proved spot on. As a result, we are just short of maximum profit for our (JPM) position.
The risk/reward of continuing until the August 16 option expiration is no longer favorable. Always leave the last few pennies of a trade for the next guy
In addition with a stock market meltdown underway and the Volatility Index ($VIX) approaching new highs for the year, a boatload of new trades are presenting themselves. Dry powder is now worth more than it usually is.
We have a handy little 1.5% pop in JP Morgan Chase shares to give us a small window to get out of this trade this morning.
I am therefore selling the JP Morgan Chase (JPM) August 2024 $190-$195 in-the-money vertical Bull Call spread at $4.95 or best.
As a result, you get to take home $1,375 or 12.50% in just 10 trading days. Well done and on to the next trade.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
(JPM) is the top commercial bank in the US, with a market capitalization of $598 billion. They are also one of the most profitable. Yet they sport a price earnings multiple of only 11.7X. They have far and away one of the most sophisticated and conservative risk control procedures out there.
The Fed will certainly cut interest rates by 25 basis this September because it is already in the mail. I did a LEAPS on (JPM) last year and followers earned a handy 100% return in nine months. I like returning to wells that refresh me.
After that, there will be no interest rate rises for a decade. The cuts will start when the economic data catch up with the reality that is happening right now, which is hugely deflationary.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and lower your offer by 5 cents with a second order.
This was a bet that JP Morgan would not fall below $195 by the August 16 option expiration day in 22 trading days. For more about (JPM), please click here for their website.
Here are the specific trades you need to close out this position:
Sell 25 August 2024 (JPM) $190 calls at………….….............……$20.00
Buy to cover short 25 August 2024 (JPM) $195 calls at………....$15.05
Net Proceeds:……………………..…….………..…………..............….....$4.95
Profit: $4.95 - $4.40 = $0.55
(25 X 100 X $0.55) = $1,375 or 12.50% in 10 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.
