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 - (SLV) – EXPIRATION
EXPIRATION of the iShares Silver Trust (SLV) November 2020 $19-$20 in-the-money vertical Bull Call spread at $1.00
Closing Trade - NOT FOR NEW SUBSCRIBERS
11-20-2020
expiration date: November 20, 2020
Portfolio weighting: 10%
Number of Contracts = 118 contracts
Provided that iShares Silver Trust shares don’t drop more than $2.57, or 11.42% by the end of today, you will realize the maximum potential profit in the iShares Silver Trust (SLV) November 2020 $19-$20 in-the-money vertical Bull Call spread at $1.00.
That means you earned $1,770, or 17.64% in 9 trading days. Well done and on to the next trade!
You don’t have to do anything with this expiration.
Your broker (are they still called that?) will automatically use your long position to cover your short position, canceling out the total holdings.
The entire profit will be credited to your account on Monday morning November 23 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
The logic behind this trade was very simple.
Silver is a great industrial play, and if you believe in the global economic recovery, you want to be loading the boat.
Silver is used in electronics and solar panels, which are about to get a big boost from the new president. Every Tesla requires 20 pounds of silver, which will more than double production next year from 500,000 to 1.1 million units.
And yes, it is still used for jewelry, which gets bought more during economic recoveries.
Silver tends to lag gold, which has already started to move. When it plays catch-up, it rises twice as fast as gold.
Stock players should keep the (SLV) shares, which probably have a double in them over the next three years.
This was a bet that the iShares Silver Trust (SLV) would not fall below $20 by the November 20 option expiration day in 9 trading days.
Here are the specific trades you need to exit this position:
Expiration of 118 November 2020 (SLV) $19 calls at…...………$3.57
Expiration of short 118 November 2020 (SLV) $20 calls at…..$2.57
Net Proceeds:………………..…..............….………..………….….......$1.00
Profit: $1.00 - $0.85 = $0.15
(118 X 100 X $0.15) = $1,770 or 17.64% in 9 trading days.
