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 - (NLY) – EXPIRATION AT MAX PROFIT
EXPIRATION of the Annaly Capital Management (NLY) December 2023 $15-$16 in-the-money vertical Bull Call spread at $1.00
Closing Trade
12-15-2023
expiration date: December 15, 2023
Portfolio weighting: 10%
Number of Contracts = 100 contracts
With this trade, we really nailed the ballistic melt-up in interest rate plays since October 26.
Just to be clear, this position does not expire until after the close on Friday, December 15. I’m sending this expiration alert out now, so I don’t overwhelm you with too many expirations at max profit in one day.
With (NLY) stock now a stunning $4.50, or 28.12% above the nearest $16 strike price, it’s safe to call this one a “win” with only one day left until expiration.
As a result of this trade, you get to take home $1,200 or 13.63% in 26 trading days. Well done and on to the next trade.
If you don’t do options, buy the stock. My target for (NLY) this year is $35, up 100%.
For long-term followers of Mad Hedge, this is a new name.
Given that the long-term top in interest rates and the bottom in fixed income prices are in, I am looking for leveraged plays on falling interest rates. Annaly Capital Management (NLY) fits the bill nicely.
Annaly's principal business objective is to generate net income and optimize its returns through prudent management of its diversified investment strategies. Its portfolio includes securities, loans, and equity in the mortgage finance market. It is in effect a leveraged long REIT, or real estate investment trust.
This strategy is designed to achieve durable risk-adjusted returns over various interest rates and economic cycles by pairing shorter-duration or floating-rate credit securities with our longer-term, fixed-rate agency portfolio.
It is the perfect falling interest rate play.
This was a bet that Annaly Capital Management (NLY)) would not fall below $16 by the December 15 option expiration.
For more about (NLY), please click here for their website.
Here is the specific account you need to close out this position:
EXPIRATION of 100 December 2023 (NLY) $15 calls at……….....……$5.16
EXPIRATION Sell short 100 December 2023 (NLY) $16 calls at…....$4.16
Net Proceeds:……………………..…….…...…….……….....................…......$1.00
Profit: $1.00 - $0.88 = $0.12
(100 X 100 X $0.12) = $1,200 or 13.63% in 26 trading days.
