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.
Tech Alert - Invesco QQQ Trust (QQQ) – TAKE PROFITS
SELL Invesco QQQ Trust (QQQ) April 2022 $375-380 in-the-money vertical BEAR PUT spread at $4.60
Closing Trade
4-5-2022
expiration date: April 14, 2022
Portfolio weighting: 10%
Number of Contracts = 24 contracts
We are only taking 47% of the maximum profit here in this trade that was a bet that QQQ won’t rise above $375 in the next 23 days.
I thought that the QQQ wouldn’t rise in a straight line and I have been completely vindicated in my assessment.
We have met some resistance at the $370 level and will take profits this morning as a Fed member describes the balance sheet sell-off as “rapid.”
We were using this mostly as a hedge as I have jumped back into the high-quality names like GOOGL on the upside.
Much of the profit here was made on the time decay as we close in towards the expiration date of the 14th of April.
Much of the interest rate tightening has been priced into the news and this allows me to free up capital by taking profits and I see this more or less as a buying opportunity.
Here are the specific trades you need to exit this position:
Sell to Close 24 April 2022 (QQQ) $380 puts at……………$16.75
Buy to Close 24 April 2022 (QQQ) $375 puts at……...…….$12.15
Net Proceeds:……………………..…….………..….............….....$4.60
Profit: $4.60 - $4.25 = $.35
(24 X 100 X $.35) = $840 or 8.24%
If you are uncertain on 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.
