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 - (TLT) – EXPIRATION
EXPIRATION of the S&P 500 (SPY) September 2021 $410-$420 in-the-money vertical BULL CALL spread at $10.00
Closing Trade - NOT FOR NEW SUBSCRIBERS, YOUR TURN WILL COME
9-17-2021
expiration date: September 17, 2021
Portfolio weighting: 10%
Number of Contracts = 11 contracts
Since we are a full $24 in-the-money with this position, I think it is safe to call this one a win.
Since we added this position, shares of the S&P 500 (SPY) have rocketed by $20.00. That is miles away from the nearest $420.00 strike price for this position.
Therefore, we get to take home the maximum profit in this position, such is the magic of vertical bull call debit spreads. That means you get to take home $1,210, or 12.35% in 23 trading days.
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.
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, September 20 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
This was a bet that the S&P 500 (SPY) would not fall below $420 by the September 17 option expiration day in 23 trading days.
Here is the specific accounting you need to close out this position:
EXPIRATION of 11 September 2021 (SPY) $410 calls at….....……$34.36
EXPIRATION of short 11 September 2021 (SPY) $420 calls at....$24.36
Net Proceeds:………………….………….............….………………..….....$10.00
Profit: $10.00 - $8.90 = $1.10
(11 X 100 X $1.10) = $1,210 or 12.35% in 23 trading days.
