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 - (WMT) – TAKE PROFITS
SELL the Walmart (WMT) September 2019 $119-$122 in-the-money vertical BEAR PUT spread at $2.67 or best
Closing Trade – NOT FOR NEW SUBSCRIBERS
9-4-2019
expiration date: September 20, 2019
Portfolio weighting: 10%
Number of Contracts = 42 contracts
Walmart shares have broken out to a new all-time high here as our “Next FANG” theory start to gain traction. As bad as the fundamentals are for the overall market, you never argue with a chart for a single stock, which is always right.
At this point, with the Mad Hedge Trade Alert Service is up a stunning 36% year-to-date, protection of profits become the name of the game. I am therefore going to de-risk the portfolio here and come out near my cost.
I am therefore selling Walmart (WMT) September 2019 $119-$122 in-the-money vertical BEAR PUT spread at $2.67 or best.
This was a bet that the Walmart (WMT) would not trade above $119.00 by the September 20 option expiration day in 19 trading days.
We did gain an additional benefit from this position in that by adding this short we were able to pile on more longs in technology than we would have otherwise. That’s where the money will be made this month.
Here are the specific trades you need to exit this position:
Sell 42 September 2019 (WMT) $122 puts at…………....……...…$6.25
Buy to cover short 42 September 2019 (WMT) $119 puts at.….$3.58
Net Cost:……………………..................…….………..………….…........$2.67
Profit: $2.67 - $2.60 = $0.07
(42 X 100 X $0.07) = $294 or 2.69% in 13 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.
