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) – TAKE PROFITS - SELL
SELL the iShares Barclays 20+ Year Treasury Bond Fund (TLT) March 2025 $94-$97 in-the-money vertical Bear Put debit spread at $2.96 or best
Closing Trade
3-7-2025
expiration date: March 21, 2025
Portfolio weighting: 10%
Number of Contracts = 40 contracts
We have just caught a $3 dive in the iShares Barclays 20+ Year Treasury Bond Fund (TLT) triggered by a massive rise in German interest rates.
The US is giving up its position as the engine of global economic growth and ceding it to Germany, which just passed a gigantic $1.3 trillion stimulus package. Germany can afford to do this because their national debt is $3 trillion compared to America’s $36 trillion.
We have already reaped 88.5% of the maximum potential profit in this trade. The risk/reward of continuing with this trade is no longer favorable.
As a result, you get to take home $1,240 or 11.70% in 6 trading days. Well done, and on to the next trade!
I am therefore selling the iShares Barclays 20+ Year Treasury Bond Fund (TLT) March 2025 $94-$97 in-the-money vertical Bear Put debit spread at $2.96 or best.
The only way to lose money on this position is if the US economy absolutely catches on fire and sends interest rates soaring in the next three weeks.
This was a bet that the (TLT) will not rise above $94.00 by the March 21 option expiration in 16 trading days.
Here are the specific trades you need to exit this position:
Sell 40 March 2025 (TLT) $97 puts at………….…….............…$7.00
Buy to cover short 40 March 2025 (TLT) $94 puts at…………$4.04
Net Proceeds:………………………….………..………….…................$2.96
Profit: $2.96 - $2.65 = $0.31
(40 X 100 X $0.31) = $1,240 or 11.70% in 6 trading days.
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.
