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.
EXPIRATION AT MAX PROFIT
EXPIRATION of the Morgan Stanley (MS) December 2024 $110-$115 in-the-money vertical Bull Call debit spread at $5.00
Closing Trade
12-20-2024
expiration date: December 20, 2024
Number of Contracts = 25 contracts
Since I have a record ten positions expiring at max profit on the Friday, December 20 options expiration, I am going to start sending out the closing trade alerts so you don’t get overwhelmed.
Since I issued it 27 trading days ago, the shares have risen by $12 or 10.43% above the nearest $115 strike price.
Just to be clear, this position does not expire until after the close on Friday, December 20.
As a result, you get to take home $1,375, or 12.36% in 29 days.
Well done, and on to the next trade.
You don’t have to do anything with this expiration.
Your broker 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 December 23, and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
The flight of money right now is from small, undercapitalized, and questionable to large, overcapitalized, and rock-solid balance sheets.
There is a new theme in the post-election market. Falling interest rates are out, deregulation is in.
There is no more regulated industry than financials, as many of you in the industry already know. Any lightening of the burden flows straight to the bottom line. It also opens up new business for (MS) in that antitrust is out the window.
That will lead to a big increase in the mergers & acquisitions business, where (JPM) is very active. It is one of their most profitable business lines. A few phone calls and you make $100 million.
I have to admit a bias in favor of Morgan Stanley. I worked there for ten years and helped pioneer many of the international business lines as well as their fund management business.
To learn more about the company, please visit their website at https://www.morganstanley.com.
This was a bet that Morgan Stanley would not fall below $115.00 by the December 20, 2024 option expiration in 29 days.
Here is the specific accounting you need to close out this position:
Expiration of 25 December 2024 (MS) $110 calls at………….………$17.48
Expiration of short 25 December 2024 (MS) $115 calls at…………$12.48
Net Proceeds:………………………….………..………….….......................$5.00
Profit: $5.00 - $4.45 = $0.55
(25 X 100 X $0.55) = $1,375, or 12.36% in 29 days.
