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 - (XME) – EXPIRATION AT MAX PROFIT
EXPIRATION of the S&P SPDR Metals & Mining ETF (XME) March 2021 $31-$34 in-the-money vertical Bull Call spread at $3.00
Closing Trade
3-19-2021
expiration date: March 19, 2021
Portfolio weighting: 10%
Number of Contracts = 38 contracts
Since we added this position, (XME) shares have risen a ballistic $6.84, or 29% from the upper strike price. As a result, we are now in a very safe cushion to take us into today’s quadruple withing option expiration at the close on March 19.
Even though we saw a temporary rotation back into technology stocks, domestically oriented (XME) just kept on going off the back of enormous global demand.
As we are so far in the money, I think it’s safe to call this a win. Therefore, you will get to take home $1,520, or 15.38% in 19 trading days.
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, March 22 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
The metals have been on a tear all year and will continue to do so. With a global economic boom in progress, shortages will develop everywhere. China, the first into the pandemic and the first out, has shown us the way: pedal, to the metal, full speed ahead at 100 miles per hour.
EVs are also generating exponential new demand for the red metal. Rotor motors on each wheel of a Tesla weighs about 100 lbs.—I’ve lifted them. Remember, I tore apart a Tesla once just to see what made it tick, and they’re really heavy, use a lot of copper, and silver as well. So that has always been the bull market case for copper.
Add that on top of a monster Biden infrastructure budget in a few months, which will demand loads of metals, and it is off to the races.
This was a bet that the (XME) will not fall below $34 by the March 19 option expiration day in 19 trading days.
Here are the specific trades you need to close out this position:
Expiration of 38 March 2021 (XME) $31 calls at………….......………$9.84
Expiration of short 38 March 2021 (XME) $34 calls at…….....…....$6.84
Net Proceeds:…………………….............…….………..……………...….....$3.00
Profit: $3.00 - $2.60 = $0.40
(38 X 100 X $0.40) = $1,520, or 15.38% in 19 trading days.
And She Only Had a Leaner's Permit
