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) – STOP LOSS
SELL the S&P 500 (SPY) October 2021 $419-$429 in-the-money vertical BULL CALL spread at $7.00 or best
Closing Trade
10-1-2021
expiration date: October 15, 2021
Portfolio weighting: 10%
Number of Contracts = 11 contracts
We just broke the upper strike price on this spread as the turmoil in Washington continues.
I am therefore selling S&P 500 (SPY) October 2021 $419-$429 in-the-money vertical BULL CALL spread at $7.00 or best
This was a bet that the S&P 500 (SPY) would not fall below $429 by the October 15 option expiration day in 14 trading days.
Here are the specific trades you need to exit this position:
Sell 11 October 2021 (SPY) $419 calls at………….…..............……$13.00
Buy to cover short 11 October 2021 (SPY) $429 calls at…..........$6.00
Net Proceeds………………………….………..…............…………..….....$7.00
Loss: $9.00 - $7.00 = -$2.00
(11 X 100 X -$2.00) = $2,200.
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.
