When John identifies a strategic exit point, he will send you an alert with specific trade information on 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) – STOP LOSS
SELL the iShares Barclays 20+ Year Treasury Bond Fund (TLT) January 2025 $82-$85 in-the-money vertical Bull Call debit spread at $2.50 or best
Closing Trade
1-14-2025
expiration date: January 17, 2025
Portfolio weighting: 10%
Number of Contracts = 40 contracts
We are approaching my intermediate-term target for ten-year US Treasury bond yields of 5.00% faster than I expected. The ten-year yield is now at 4.80%. The bond market appears unable to rally on good news like we got today with the weak PPI.
I am therefore stopping out of my bond position, even though we have only two days left until we reach the January 17 options expiration and we are at a nine-month double bottom.
I am therefore selling the iShares Barclays 20+ Year Treasury Bond Fund (TLT) January 2025 $82-$85 in-the-money vertical Bull Call debit spread at $2.50 or best.
This was a bet that the (TLT) would not fall below $85.00 by the January 17 option expiration in 9 trading days.
Here are the specific trades you need to exit this position:
Sell 40 January 2025 (TLT) $82 calls at………….….......……$3.20
Buy to cover short 40 January 2025 (TLT) $85 calls at……$0.70
Net Proceeds:………………………….………..………….…............$2.50
Loss: $2.70 - $2.50 = -$0.20
(40 X 100 X -$0.20) = $800
It’s now the Opening Act for the Bond Market
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.
