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) May 2023 $335-$345 in-the-money vertical BEAR PUT spread at $9.98 or best
Closing Trade – NOT FOR NEW SUBSCRIBERS
5-4-2023
expiration date: May 19, 2023
Portfolio weighting: increase from 10%
Number of Contracts = 12 contracts
I am getting reports that followers are closing out this position at $9.98 right now. I am therefore going to use this morning’s weakness to close out our last short position.
Besides, I am never averse to taking a two-day, 8.50% profit. When the market offers you a gift, you grab it with both hands. This is definitely a “Take the money and run” market.
I am therefore selling the Invesco QQQ Trust NASDAQ ETF (QQQ) May 2023 $335-$345 in-the-money vertical BEAR PUT spread at $9.98 or best.
That means you get to take home $936, or 8.50% in only 2 trading days. Well done and on to the next trade!
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
I think we are in for a market correction in May and that technology will lead on the downside with the 25-basis point Fed rate increase now out of the way.
Once the Apple (AAPL) earnings are out of the way after the close today, the market will have nothing to focus on but an imminent US government debt default for the next two months and maybe longer.
This is not a good thing.
Tech stocks now have the kiss of death on them and are still expensive relative to the S&P 500 (SPY). That makes them a great short.
Technology will eventually recover in the second half of the year but will have to test lower lows first.
The (QQQ) is the favorite proxy for tech stocks. Its five largest holdings are Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), NVIDIA (NVDA), and Alphabet (GOOG). To learn more about the (QQQ), please click here.
This was a bet that the Invesco QQQ Trust NASDAQ ETF S&P 500 (QQQ) would not trade above $335.00 by the May 19 option expiration day in 19 trading days.
If you don’t do options, stand aside. This is a very short-term options expiration play only.
Here are the specific trades you need to close out this position:
Sell 12 May 2023 (QQQ) $345 puts at……..............…….………$29.00
Buy to cover short 12 May 2023 (QQQ) $335 puts at………….$19.02
Net Proceeds:………………………….……...........…..………….….....$9.98
Profit: $9.98 - $9.20 = $0.78
(12 X 100 X $0.78) = $936 or 8.50% in 2 trading days.
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.
