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) – EXPIRATION AT MAX PROFIT
EXPIRATION of the JP Morgan (JPM) March 2021 $135-$140 in-the-money vertical Bull Call spread at $5.00 or best
Trade Date: 3-18-2021– NOT FOR NEW SUBSCRIBERS, YOUR TURN WILL COME
Expiration Date: March 19, 2021
Portfolio weighting: 10%
Number of Contracts = 24 contracts
Since we added this position, JP Morgan shares have risen a respectable $5.73, or 3.87%. As a result, we are now a very safe cushion to take us into tomorrow’s quadruple within option expiration on March 19. Even though we saw a major rotation back into technology stocks, domestically oriented (JPM) held up nicely.
Although this position does not expire until tomorrow, I think it’s safe to call it a win. Therefore, you get to take home $2,400, or 25.00% in 11 trading days.
This proved to be the perfect rising interest rate play. JP Morgan almost matched the rise in interest rates tick for tick as bonds went to hell in a handbasket.
That pushed the Volatility Index (VIX) up to a sky-high $38, which has the effect of vastly overvaluing stock options. This is a gift for traders like us.
In addition, my own Mad Hedge Market Timing Index has moved back into “BUY” territory with a heart-stopping 25-point swan dive, from 66 to at 41. This is the lowest level on months. All of this made this position very low risk and high return.
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 March 22 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
(JPM) is the class act in the global banking sector, and CEO Jamie Diamond is the best CEO in the country.
I believe that massive government borrowing, and spending will drive US interest rates up through the roof and the value of the US dollar (UUP) down. Banks love high-interest rates because they vastly improve profit margins.
This was a bet that JP Morgan (JPM) would not fall below $140 by the March 19 option expiration day in 11 trading days.
Here are the specific trades you need to close out this position:
EXPIRATION of 24 March 2021 (JPM) $135 calls at….....……$19.52
EXPIRATION of short 24 March 2021 (JPM) $140 calls at....$14.52
Net Proceeds:……………………..…..........….………..………….….....$5.00
Profit: $5.00 - $4.00 = $1.00
(24 X 100 X $1.00) = $2,400 or 25.00% in 11 trading days.
