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
EXPIRATION of the JP Morgan (JPM) September 2020 $90-$95 in-the-money vertical Bull Call spread at $5.00
Closing Trade - NOT FOR NEW SUBSCRIBERS
NOTE: NEW SUBSCRIBERS WILL RECEIVE A BATCH OF NEW TRADE ALERTS ONCE WE SEE A FAVORABLE ENTRY POINT IN THE MARKET.
9-18-2020
expiration date: September 18, 2020
Portfolio weighting: 10%
Number of Contracts = 23 contracts
Provided that JP Morgan shares don’t drop more than $3.56 over the next few minutes, you will realize the maximum potential profit in the JP Morgan (JPM) September 2020 $90-$95 in-the-money vertical Bull Call spread.
That means you will earn $1,610, or 16.27% in 9 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 September 21 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
Banks are the quality play in the market right now as it has the lowest price earnings multiple at 6X, and the best growth outlook in any economic recovery.
Banks now account for 15.5% of (SPY) earnings but are only 10% of stock market capitalization. Big tech gives us 13% of earnings but are a hefty 20% of market capitalization. Because of this, there is about to be a big rotation out of tech and into banks.
This cycle of COVID-19 infections is imminently going to peak out and start declining, at least for the short term.
As a result, I believe the core long FANG trade is long overdue for a break. Instead, I think we are about to witness a major rotation into domestic economic “recovery” stocks. Stocks will keep going up, but the leadership will change. Bonds and gold are also due for profit-taking.
There is no better domestic recovery play than the big banks. During a recovery they will benefit from steeply rising interest rates, fewer defaults, yet continued government subsidies. The crown jewel of the American banking system in JP Morgan Chase Bank.
Stock players should go ahead and keep the shares, which probably have a double in them over the next three years.
This was a bet that JP Morgan (JPM) would not trade below $95 by the September 18 option expiration day in 9 trading days.
Here are the specific numbers you need to close out this position:
EXPIRATION of 23 September 2020 (JPM) $90 calls at………….………$8.56
EXPIRATION of short 23 September 2020 (JPM) $95 calls at….….…..$3.56
Net Proceeds:….…………................................…….………..………….….....$5.00
Profit: $5.00 - $4.30 = $0.70
(23 X 100 X $0.70) = $1,610, or 16.27% in 9 trading days.
