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
EXPIRATION of the Visa (V) September 2020 $180-$185 in-the-money vertical Bull Call spread at $5.00
Closing Trade - NOT FOR NEW SUBSCRIBERS
NOTE: NEW SUBSCRIBERS WILL RECEIVE A BATCH OF NEW TRADE ALERTS ONCE WE SEE A FAVORABLE ENTRY POINT IN THE MARKET.
9-18-2020
expiration date: September 18, 2020
Portfolio weighting: 10%
Number of Contracts = 23 contracts
Unless we dive $18.35 in the next hour, we will capture the maximum profit in the Visa (V) September 2020 $180-$185 in-the-money vertical Bull Call spread.
By coming out here, you get to realize $1,610, or 16.27% in 9 trading days.
We added this position during one of those throw-up-on-your-shoes capitulation days when the Volatility Index (VIX) topped $38. To the bold, go the prizes.
You don’t have to do anything with this expiration.
Your broker (are they still called that?) 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 September 21 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
Visa is the quality play in the credit card area, recently growing at the expense of Master Card and American Express. The world is rushing into an all-digital economy and (V) is a major beneficiary.
They also have profited hugely from the move to “touchless” transactions where people are afraid of using physical cash for fear of contracting Covid-19.
This cycle of COVID-19 infections is imminently going to peak out and start declining, at least for the short term.
As a result, I believe the core long FANG trade is long overdue for a break. Instead, I think we are about to witness a major rotation into domestic economic “recovery” stocks like Visa. Stocks will keep going up, but the leadership will change. Bonds and gold are also due for profit-taking.
This was a bet that Visa (V) would not trade below $185 by the September 18 option expiration day in 9 trading days.
Here are the specific number you need to close out this position:
EXPIRATION of 23 September 2020 (V) $180 calls at………….………$23.35
EXPIRATION of short 23 September 2020 (V) $185 calls at….….…..$18.35
Net Proceeds:……………………..…....................….………..………….….....$5.00
Profit: $5.00 - $4.30 = $0.70
(23 X 100 X $0.70) = $1,610, or 16.27% in 9 trading days.
