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 - (V) – EXPIRATION AT MAX PROFIT
EXPIRATION of the Visa (V) June 2022 $150-$160 in-the-money vertical Bull Call spread at $10.00
Closing Trade
6-17-2022
expiration date: June 17, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
This has been another killer trade for us. (V) remains an eye-popping $46, or 28.75% above our nearest strike price.
Just to be clear, this position does not expire at max profit until Friday, June 17 at the 4:00 pm EST close. But with seven positions expiring at the same time, I am going to start rolling out the accounting now, so you don’t get overwhelmed.
I think it is safe to call this one a win. As a result, you get to take home $1,560 or 14.94%.
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, June 20 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
Visa is the largest credit card processor in the US, followed by Master Card (MA) and American Express (AXP). It is a pure play on inflation as high prices feed straight into higher credit card fees. It also benefits enormously from the digitization of the economy where an increasing share of the economy is transacted online. (V) is one of the world’s most valuable companies.
This was a bet that Visa (V) would not fall below $160 by the June 17 options expiration day in 24 trading days.
Here are the specific trades you need to close out this position:
Expiration of 12 June 2022 (V) $150 calls at…………..………$36.16
Expiration of short 12 June 2022 (V) $160 calls at………....$26.16
Net Proceeds:…………………....…..…….………..………….….....$10.00
Profit: $10.00 - $8.70 = $1.30
(12 X 100 X $1.30) = $1,560 or 14.94%.
