Trade Alert - (SPY) May 6, 2025 - STOP LOSS

When John identifies a strategic exit point, he will send you an alert with specific trade information on 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-STOP LOSS

SELL the S&P 500 (SPY) May 2025 $570-$580 in-the-money vertical bear put debit spread at $8.00 or best

Closing Trade

5-6-2025

expiration date: May 16, 2025

Portfolio weighting: 10% weighting

Number of Contracts = 12 contracts

It needed an incredible 20% move up in the S&P 500 in a month for us to lose money on this trade. But that’s exactly what’s happened. April brought us moves that we only see two or three times in a century.

We are getting too close to our near $570 strike price with eight trading days until the May 16 option expiration. I have big profits to protect so far this year. The time to exercise strict risk control is now, and I am still below my 2% capital loss limit for a single trade.

We also now have an administration actively trying to talk the market up, making near-money short positions more challenging to manage.

Therefore, I am selling the S&P 500 (SPY) May 2025 $570-$580 in-the-money vertical bear put debit spread at $8.00 or best.

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 10 cents with a second order.

If you live in a foreign time zone when the US stock market is closed, such as Australia, or don’t want to sit in front of a screen all day, simply enter a spread of Good-Until-Cancelled orders overnight, like $8.00, $7.90, $7.80, and $7.70. You should get done on some or all of these.

This was a bet that the S&P 500 (SPY) would not trade above $570 in 17 trading days.

Here are the specific trades you need to exit this position:

Sell 12 May 2025 (SPY) $580 puts at…………………….....….…$21.00

Buy to cover short 12 May 2025 (SPY) $570 puts at………….$13.00

Net Proceeds:………………………….……………….....................…$8.00

Loss: $8.60 - $8.00 = $0.60

(12 X 100 X $0.60) = $720.

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.

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