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) October 2022 $320-$330 in-the-money vertical bull call spread at $9.70 or best
Closing Trade
10-11-2022
expiration date: October 21, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
With 78.50% maximum potential profit in hand, I am cutting my long position in the S&P 500. With the blockbuster Consumer Price Index out on Thursday morning, I am going to take the money and run.
The market could be up 1,000 points, down 1,000 points, or both. As we have enormous profits to protect, I am raising more cash.
Therefore, I am selling the S&P 500 (SPY) October 2022 $320-$330 in-the-money vertical bull call spread at $9.70 or best.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and lower your offer by 5 cents with a second order.
This was a bet that the S&P 500 (SPY) would not trade below $330.00 by the October 21 options expiration day in 18 trading days.
Here are the specific trades you need to close out this position:
Buy 12 October 2022 (SPY) $320 calls at……...….…$39.00
Sell short 12 October 2022 (SPY) $330 calls at…….$29.30
Net Proceeds:………………………….………...........………$9.70
Profit: $9.70 - $8.60 = $1.10
(12 X 100 X $1.10) = $1,320 or 12,79% in 10 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.
