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 - (QQQ) – TAKE PROFITS
SELL the Invesco QQQ Trust NASDAQ ETF (QQQ) September 2022 $350-$360 in-the-money vertical BEAR PUT spread at $9.90 or best
Closing Trade
8-22-22
expiration date: September 16, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
91.7% of the maximum potential profit in only two trading days? I’ll take that, or anything close to it.
Since I added this position on Thursday, the (QQQ) has been in free fall, dropping some $17.00, or 5%. The risk/reward of continuing for 19 more trading days is no longer favorable.
We also got a nice assist with the Volatility Index (VIX) leaping from $19 to $24.
Time to skedaddle or take the money and run.
I am therefore selling the Invesco QQQ Trust NASDAQ ETF (QQQ) September 2022 $350-$360 in-the-money vertical BEAR PUT spread at $9.90 or best.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
This was a bet that the Invesco QQQ Trust NASDAQ ETF S&P 500 (QQQ) would not trade above $350.00 by the September 16 options expiration day in 20 trading days.
Here are the specific trades you need to exit this position:
Sell 12 September 2022 (QQQ) $360 puts at……….....….………$44.00
Buy to cover short 12 September 2022 (QQQ) $350 puts at….$34.10
Net Proceeds:………………………….………..….............……….….....$9.90
Profit: $9.90 - $8.80 = $1.10
(12 X 100 X $1.10) = $1,320 or 12.50% in 2 trading 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.
