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 the iShares Barclays 20+ Year Treasury Bond Fund (TLT) June 2019 $128-$131 in-the-money vertical BEAR PUT spread at $2.75 or best
Closing Trade
5-16-2019
expiration date: June 21, 2019
Portfolio weighting: 10%
Number of Contracts = 38 contracts
Failure of the bond market to drop precipitously in the wake of the impressive 600-point rally in the Dow average is scaring me out of my short position.
This week, we had a run of weak economic data which suggests the bond market may be right in its prediction of a coming recession.
It's better to come out for even than fight a position that may be a loser.
Therefore, I am selling the iShares Barclays 20+ Year Treasury Bond Fund (TLT) June 2019 $128-$131 in-the-money vertical BEAR PUT spread at $2.75 or best.
This was a bet that the (TLT) will not rise above $128 by the June 21 option expiration in 28 trading days.
Here are the specific trades you need to exit this position:
Sell 38 June 2019 (TLT) $131 puts at………….…….....…………$5.50
Buy to cover short 38 June 2019 (TLT) $128 puts at…………$2.75
Net Proceeds:………………………….………..…………………................$2.75
Profit: $2.75 - $2.60 = $0.15
(38 X 100 X $0.15) = $570 or 5.45% in 2 trading days.
To see how to enter this trade in your online platform, please look at the order ticket above, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video on How to Execute Vertical Call and Put Debit Spreads by clicking here.
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Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In today's market, investors need every advantage they can get.
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 close to expiration.
If you don't get done, don't worry. There are another 250 Trade Alerts coming at you over the coming 12 months.
