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 - (MSFT) – EXPIRATION AT MAX PROFIT
Expiration of the Microsoft (MSFT) July 2022 $200-$210 in-the-money vertical Bull Call spread at $10.00
Closing Trade
7-15-2022
expiration date: July 15, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
We have yet another home run on the long with the Friday expiration. (MSFT) is now trading an amazing $41.39 away from our nearest $210 strike price.
Time to ring the cash register once again. Those who were panicking at the market bottom last month missed a great opportunity.
Just to be clear, this position does not expire at max profit until Friday, July 15 at the 4:00 EST close. But with five positions expiring at the same time, I am going to start rolling out the accounting now so you don’t get overwhelmed.
I think it is safe to call this one a win. As a result, you get to take home $1,440 or 13.64% in 23 trading 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, July 18 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
This was another opportunity to buy Cadillacs at Volkswagen prices.
You would need a crash of Biblical proportions, on the scale of the 1987 crash, to lose money on this trade which the current state of the economy didn’t justify.
This was a bet that Microsoft would not fall below $210 by the July 15 option expiration.
Here is the specific accounting you need to close out this position:
Expiration of 12 July 2022 (MSFT) $200 calls at………...…$51.39
Expiration of short 12 July 2022 (MSFT) $210 calls at……$41.39
Net Proceeds:………………………….……..............…..………….$10.00
Profit: $10.00 - $8.80 = $1.20
(12 X 100 X $1.20) = $1,440 or 13.64% in 23 trading days.
