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) - BUY
Buy the S&P 500 (SPY) October 2022 $320-$330 in-the-money vertical bull call spread at $8.60 or best
Opening Trade
9-27-2022
expiration date: October 21, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
The Volatility Index (VIX) just hit $34, which may be the short-term peak. Both stocks and bonds are oversold in the extreme, so we may get a tradable rally here.
To minimize my risk, I am going WAY in the money with this spread, some 10% in 18 days. You have to strike while the iron is hot, and the rest of the market is throwing up on their shoes.
Therefore, I am buying the S&P 500 (SPY) October 2022 $320-$330 in-the-money vertical bull call spread at $8.60 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 increase your bid by 5 cents with a second order.
Don’t pay more than $9.00 or you will be chasing.
If you don’t do options, stand aside. This is a short-term options play only.
This is a bet that the S&P 500 (SPY) will not trade below $330.00 by the October 21s option expiration day in 18 trading days.
Here are the specific trades you need to execute this position:
Buy 12 October 2022 (SPY) $320 calls at……...….…$46.00
Sell short 12 October 2022 (SPY) $330 calls at…….$37.40
Net Cost:………………………….….................…….………$8.60
Profit: $10.00 - $8.60 = $1.40
(12 X 100 X $1.40) = $1,680 or 16.28% in 18 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.