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) – BUY
BUY the JP Morgan (JPM) December 2020 $100-$105 in-the-money vertical Bull Call spread at $4.50 or best
Opening Trade
11-17-2020
expiration date: December 18, 2020
Portfolio weighting: 10%
Number of Contracts = 24 contracts
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.
As we saw last week, 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.
I am therefore buying the JP Morgan (JPM) December 2020 $100-$105 in-the-money vertical Bull Call spread at $4.50 or best.
Don’t pay more than $4.70 or you’ll be chasing.
Stock players buy the shares, which probably have a double in them over the next three years.
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 increase your bid by 10 cents with a second order.
This is a bet that JP Morgan (JPM) will not fall below $105 by the December 18 option expiration day in 23 trading days.
Here are the specific trades you need to execute this position:
Buy 24 December 2020 (JPM) $100 calls at………….………$16.60
Sell short 24 December 2020 (JPM) $105 calls at………....$12.10
Net Cost:……………………..…….………..…............……….….....$4.50
Potential Profit: $5.00 - $4.50 = $0.50
(24 X 100 X $0.50) = $1,200 or 11.11% in 23 trading days.
To see how to enter this trade in your online platform, please look at the order ticket above, which I pulled off of Interactive Brokers.
If you are uncertain on 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.
