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 - (WPM) – TAKE PROFITS
SELL the Wheaton Precious Metals (WPM) October 2024 $50-$55 in-the-money vertical Bull Call debit spread at $4.85 or best
Closing Trade
9-18-2024
expiration date: October 18, 2024
Portfolio weighting: 10%
Number of Contracts = 25 contracts
De-risking in front of a major event is always a good idea. The Fed is going to cut interest rates in a few hours at 11:00 AM EST, but I have no idea whether it will be by 25 or 50 basis points. And whatever the move, I have no idea whether the market will go up or down.
We have captured 75% of the maximum potential profit on this trade in only four trading days. The risk/reward of continuing 22 more trading days is no longer favorable. Dry powder is more valuable here to trade with after the Fed decision.
A Fed interest rate cut of 25 basis points is now a certainty on September 18, and all falling interest rate plays in the stock market are in play. Rising rate plays and flat technology could be the trade for the rest of 2024.
Stock players should keep the (WPM) shares, which will probably have double in them over the next two years.
With the world looking for a “safe” trade, it is time to keep it in precious metals.
I am therefore selling the Wheaton Precious Metals (WPM) October 2024 $50-$55 in-the-money vertical Bull Call debit spread at $4.85 or best.
As a result, you get to take home $1,125 or 10.23% in 4 trading days. Well done, and on to the next trade.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and lower your offer by 5 cents with a second order.
Wheaton Precious Metals Corp. is a multinational precious metals dividend streaming company, also known as a royalty trust. It indirectly produces over 26 million ounces a year via short-term options and contracts with mining companies all over the world, including Mexico, Portugal, The US, Chile, and Peru. It is, in effect, the best-leveraged play on silver out there.
To learn more about the operation of Wheaton Precious Metals Corp, please visit their site by clicking here.
Silver is a great industrial play, and if you believe in the global economic recovery, you want to be loading the boat.
It is used in electronics and solar panels, which are about to get a big boost from the new president. Every Tesla requires 20 pounds of silver, which will increase production next year by 40% from 1.3 million to 1.8 million units.
And yes, it is still used for jewelry, which gets bought more during economic recoveries.
Silver tends to lag gold, which has already started to move. When it plays catch-up, it rises twice as fast as gold.
This is a bet that the Wheaton Precious Metals (WPM) will not fall below $55 by the October 18 option expiration day in 26 trading days.
Here are the specific trades you need to exit this position:
Sell 40 October 2024 (WPM) $50 calls at…………...............………$12.00
Buy to cover short 40 October 2024 (WPM) $55 calls at…………....$7.15
Net Proceeds:……………………..…….………..………….….....................$4.85
Profit: $4.85 - $4.40 = $0.45
(25 X 100 X $0.45) = $1,125 or 10.23% in 4 trading days.
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.
