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 - (SPY) – TAKE PROFITS
SELL the S&P 500 (SPY) June 2022 $435-$445 in-the-money vertical bear put spread at $9.90 or best
Closing Trade
5-19-2022
expiration date: June 17, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
Some 1,600 Dow points in two days is enough for me. My downside hedge worked. We now have 91.67% of the maximum potential profits for this position in hand.
I am therefore selling the S&P 500 (SPY) June 2022 $435-$445 in-the-money vertical bear put spread at $9.90 or best
By coming out here, you get to take home $1,320, or 12.50% in 2 trading days. Well done and on to the next trade.
This was a bet that the S&P 500 (SPY) will not trade above $435.00 by the June 17 option expiration day in 22 trading days.
Here are the specific trades you need to execute this position:
Buy 12 June 2022 (SPY) $435 puts at………….………$56.00
Sell short 12 June 2022 (SPY) $445 puts at………….$46.10
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.
