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 AT MAX PROFIT
EXPIRATION of the iShares Barclays 20+ Year Treasury Bond Fund (TLT) January 2023 $96-$99 in-the-money vertical Bull Call spread at $3.00
Closing Trade - NOT FOR NEW SUBSCRIBERS!
1-20-2023
expiration date: January 20, 2023
Portfolio weighting: 10%
Number of Contracts = 40 contracts
Since (TLT) shares for this spread are now an amazing $12.49, or 13.01% in the money, a huge amount for the bond market, I think it’s safe to call this one a win even though we have one more day until expiration.
We have the good fortune to have six options positions expiring at their maximum profit points at 4:00 PM on Friday, January 20. So you don’t get overwhelmed by getting six trade alerts at once, I will start feeding them out now.
As a result, you get to take home $1,600, or 15.38% in 19 trading days.
Well done and on to the next trade.
You don’t have to do anything with this expiration.
Your broker 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, January 23 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
It is amazing to me that bonds fell $10, and ten-year US Treasury yields popped from 3.5% to 3.9% going into a recession.
But then this has been a month of unbelievable moves, the worst in market history. Never argue with Mr. Market. He is always right.
This was a bet that the (TLT) would not fall below $99.00 by the January 20 option expiration in 19 trading days.
Here is the specific accounting you need to close out this position:
Expiration of 40 January 2023 (TLT) $96 calls at……………$11.99
Expiration of short 40 January 2023 (TLT) $99 calls at……$8.99
Net Proceeds:……………………...............………..………….….....$3.00
Profit: $3.00 - $2.60 = $0.40
(40 X 100 X $0.40) = $1,600, or 15.38% in 19 trading days.
It’s now the Opening Act for the Bond Market
