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 - (NEM) - BUY
BUY the Newmont Mining (NEM) February, 2018 $36-$39 in-the-money vertical BULL CALL spread at $2.69 or best
Opening Trade
1-25-2018
expiration date: February 16, 2018
Portfolio weighting: 10%
Number of Contracts = 37 contracts
This is a bet that Newmont Mining shares (NEM) will NOT fall below $39 by the February 16 option expiration in 16 trading days, compared to the current $41.51.
Don't pay more than $2.80 for this position or you'll be chasing.
It looks like gold is breaking out to the upside creating a new leg to a nascent bull market, so I want to move to double up my position in the sector by adding 10% more in the gold miners.
The world is clearly rushing to embrace inflation and hard asset plays.
We could be one presidential tweet away from a home run on this position.
If you can't trade options, buy Newmont Mining shares outright. We have some serious work to do on the upside.
Colorado based Newmont Mining is the world's second largest gold producer, with mines in Nevada, Indonesia, Australia, New Zealand, Ghana, and Peru.
In 2016, Newmont produced 4.9 million ounces of GOLD and generated revenues of US$6.7 billion. All-in sustaining costs totaled $912 per ounce of gold produced, one of the lowest in the world.
It is one of the top establishment gold miners.
Here are the specific trades you need to execute this position:
Buy 37 February, 2018 (NEM) $36 calls at...........................................$5.70
Sell short 37 February, 2018 (NEM) $39 calls at....................................$3.01
Net Cost:..........................................................................................
Potential Profit: $3.00 - $2.69 = $0.31
(37 X 100 X $0.31) = $1,147 or 11.52% in 16 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.
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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.
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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.