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 - (NVDA) – TAKE PROFITS
SELL the NVIDIA (NVDA) May 2024 $980-$990 in-the-money vertical Bear Put debit spread at $9.85 or best
Closing Trade
5-14-2024
expiration date: May 17, 2024
Number of Contracts = 12 contracts
There is no better trading strategy than taking profits on a position the day before a major data release, like tomorrow’s Consumer Price Index. Fortunately, NVIDIA has cooperated today taking its shares down, boosting the profit on our short position.
With 87.5% of the maximum profit in hand, the risk/reward is no longer favorable to hold this position for the three remaining days until the May 17 option expiration.
I am therefore selling the May 2024 $980-$990 in-the-money vertical Bear Put debit spread at $9.85 or best.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES. Just enter a limit order and work it.
This was a bet that NVIDIA would not rise above $980 by the May 17 option expiration in 3 trading days, a new all-time high.
Here are the specific trades you need to close out this position:
Sell 12 May 2024 (NVDA) $990 puts at………….…….......…$84.00
Buy to cover short 12 May 2024 (NVDA) $980 puts at...…$74.15
Net Proceeds:………………………….………….….......................$9.85
Profit: $9.85 - $8.80 = $1.05
(12 X 100 X $1.05) = $1,260 or 11.93% in 13 days.
If you are uncertain about how to execute an options spread, please watch my training video by clicking here.
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 on expiration months farther out.
Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.
