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) – TAKE PROFITS
SELL the Microsoft (MSFT) November 2018 $90-$95 in-the-money vertical BULL CALL spread at $4.98 or best
Closing Trade -NOT FOR NEW SUBSCRIBERS
11-5-2018
expiration date: November 16, 2018
Portfolio weighting: 10%
Number of Contracts = 22 contracts
It’s time for the Mad Hedge Technology Letter to de-risk also.
I am therefore selling the Microsoft (MSFT) November 2018 $90-$95 in-the-money vertical BULL CALL spread at $4.98 or best
With 96% of the maximum potential profit in hand the risk/reward of continuing with this position is no longer favorable. I’ll leave it to the newbies to carry it for nine more trading days and through the midterm elections.
I spent Sunday speaking to political strategists and have come to a disturbing conclusion. The turnout for the Midterm elections on Tuesday is likely to be the largest in history, with some states seeing turnouts triple that of all-time highs. That has rendered all polls and forecasting models useless. So, ANYTHING could happen. It is all a perfect prescription for stock market volatility.
By coming out here you get to realize a profit of $1,056, or 10.66%, in only 18 trading days.
This was a bet that the Microsoft (MSFT) would not trade below $95 by the November 16 option expiration day in 27 trading days. That was a level 12% down from the current price.
If you own the stock keep it. It is going much higher.
Here are the specific trades you need to execute this position:
Sell 22 November 2018 (MSFT) $90 calls at………….………$16.45
Buy to cover short 22 November 2018 (MSFT) $95 calls a….$11.47
Net Proceeds:………………………….………..………….….....$4.98
Profit: $4.98 - $4.50 = $0.48
(22 X 100 X $0.48) = $1,056 or 10.66% in 18 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 on How to Execute Vertical Call and Put Debit Spreads by clicking here.
You must be logged into your account to view the video.
Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In today's market, investors need every advantage they can get.
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 close to expiration.
If you don't get done, don't worry. There are another 250 Trade Alerts coming at you over the coming 12 months.
