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 - (META) – TAKE PROFITS
SELL the (META) May 2024 $360-$370 vertical BULL CALL spread at $9.95 or best
Closing Trade
5-7-2024
expiration date: May 17, 2024
Portfolio weighting: 10%
Number of Contracts = 12 contracts
If the trading history of this year provides any lessons, it is that one-day meltdowns of the highest quality stocks are huge “BUYS”.
As a result, we get a great entry point in one of the front runners of the AI revolution. (META) is (NVIDIA)’s largest customer for high-end graphics chips, which says a lot.
Therefore, I am selling the (META) May 2024 $360-$370 vertical BULL CALL spread at $9.95 or best.
As a result, you get to take home $1,380 or 13.07% in 10 trading days. Well done and on to the next trade.
This was a bet that the (META) would not fall below $370.00 by the May 17 option expiration in 8 trading days. It was also a bet that (META) would not break below the 200-day moving average at $372, some $60, or 13.67% lower, where it had huge support.
Here are the specific trades you need to close out this position:
Sell 12 May 2024 (META) $360 calls at………....….………$106.00
Buy to cover short 12 May 2024 (META) $370 calls at….$96.05
Net Proceeds:……..…………….………..………….…..................$9.95
Profit: $9.95 - $8.80 = $1.15
(12 X 100 X $1.15) = $1,380 or 13.07% in 10 trading days.
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video on “How to Execute a Vertical Bull Call Spread” by clicking here at
http://www.madhedgefundtrader.com/ltt-vbpds/
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.
