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.
BUY the S&P 500 (SPY) September 2021 $410-$420 in-the-money vertical BULL CALL spread at $8.90 or best
Opening Trade
8-17-2021
expiration date: September 17, 2021
Portfolio weighting: 10%
Number of Contracts = 11 contracts
We managed to rally the Volatility Index just short of $20 this morning off the back of a 450 dive in the S&P 500. This has been the first decent entry point for a long in a month.
We are coming off of extreme overbought conditions, especially in technology stocks. In any case, selling off on spectacular earnings reports has become a regular part of this market.
The wall of money is still there, and in fact, it is growing.
I am therefore buying the S&P 500 (SPY) September 2021 $410-$420 in-the-money vertical BULL CALL spread at $8.90 or best
Don’t pay more than $9.40 or the risk/reward is not worth it.
This is a bet that the S&P 500 (SPY) will not fall below $420 by the September 17 option expiration day in 23 trading days.
Here are the specific trades you need to execute this position:
Buy 11 September 2021 (SPY) $410 calls at…………...………$33.00
Sell short 11 September 2021 (SPY) $420 calls at…………...$24.10
Net Cost:………………………….………..………............……..….....$8.90
Potential Profit: $10.00 - $8.90 = $1.10
(11 X 100 X $1.10) = $1,210 or 12,35% in 23 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.
