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 - (WYNN) – TAKE PROFITS
SELL the Wynn Resorts (WYNN) March 2020 $110-$115 in-the-money vertical Bear Put spread at $4.95 or best
Closing Trade - NOT FOR NEW SUBSCRIBERS
3-11-2020
expiration date: March 20, 2020
Portfolio weighting: 10%
Number of Contracts = 25 contracts
I am going to keep with my buy low, sell high philosophy.
So, I am going to use today’s 1,300-point dip in the Dow Average to cover another short. It’s not often that I get to sell short a stock like (WYNN) and watch it collapse 23% in 4 trading days, but that is what has happened.
In any case, we have already squeezed all the juice out of this trade and dry powder now has great value.
My bet that the Corona effects on the hotel and casino industry were vastly underestimated by the market and that the industry was about to implode proved correct.
The World Health Organization (WHO) has just declared Corona a global pandemic. That is the ideal time to cover shorts in this industry. (WYNN) is down a staging 50% in two months.
The short-term outlook for the casino seems hopeless, with the global pandemic increasing by the day.
I am therefore selling the Wynn Resorts (WYNN) March 2020 $110-$115 in-the-money vertical Bear Put spread at $4.95 or best.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
To earn this much money on a spread 15% in-the-money with only 10 days to expiration is unimaginable, but that is the kind of trade that a (VIX) of $50 allows.
To lose money on this trade, (WYNN) would have to rise above $110 in 10 days, a gain of 15% from that day’s level.
This was a bet that Wynn Resorts (WYNN) would not trade above $110 by the March 20 option expiration day in 10 trading days.
Here are the specific trades you need to execute this position:
Sell 25 March 2020 (WYNN) $115 puts at………….......…….…$35.00
Buy to cover short 25 March 2020 (WYNN) $110 puts at…..$30.05
Net Proceeds:……………………..…….…........……..………….…......$4.95
Profit: $4.95 - $4.00 = $0.95
(25 X 100 X $0.95) = $2,375 or 23.75% in 4 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.
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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.
