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) – STOP LOSS
SELL the JP Morgan Chase (JPM) March 2025 $235-$245 in-the-money vertical Bull Call spread at $8.50 or best
Closing Trade
3-5-2025
expiration date: March 21, 2025
Portfolio weighting: 10%
Number of Contracts = 12 contracts
The collapse of bank shares can only mean one thing. That a recession is now much more likely. A 20% selloff down to $5,000 in the S&P 500 becomes a sure thing and a 50% crash is on the table. We are one day into a trade war that could continue for months….or years.
If it were just the banks, I wouldn’t be so worried. But ALL economically sensitive asset classes are giving recession warnings, including bonds, oil, commodities, and foreign currencies. It’s amazing how much damage can be done in only a month.
With the market in freefall, I am stepping out of this position. We are at our upper strike price at $245, and the risk/reward is no longer favorable. We should easily make back this loss with our short positions. I am not waiting for the upper strike price in this position to be broken.
I am therefore selling the JP Morgan Chase (JPM) March 2025 $235-$245 in-the-money vertical Bull Call spread at $8.50 or best.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and lower your offer by 10 cents with a second order.
If you live in a foreign time zone when the US stock market is closed, such as Australia, or don’t want to sit in front of a screen all day, simply enter a spread of Good-Until-Cancelled orders overnight, like $8.50, $8.40, $8.30, $8.20, and $8.10. You should get done on some or all of these.
This was a bet that JP Morgan will not fall below $245 by the March 21 option expiration day in 19 trading days. For more about (JPM), please click here for their website.
Here are the specific trades you need to exit this position:
Sell 12 March 2025 (JPM) $235 calls at………….……….…………..$18.00
Buy to cover short 12 March 2025 (JPM) $245 calls at…………….$9.50
Net Proceeds:……………………..…….………..………….………………….$8.50
Loss: $8.50 – $9.00 = -$0.50
(12 X 100 X -$0.50) = -$600.
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.
