Trade Alert - (MSTR) May 7, 2025 - TAKE PROFITS

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 - (MSTR) - TAKE PROFITS

SELL the MicroStrategy (MSTR) May 2025 $220-$230 in-the-money vertical bull call debit spread at $9.95 or best

Closing Trade

5-7-2025

expiration date: May 16, 2025

Portfolio weighting: 10% weighting

Number of Contracts = 12 contracts

I think it's now safe to call this trade a win.

Since we added it 11 trading days ago, (MSTR) has appreciated some $158, or 69% above the nearest strike price. We also caught a nice drop in option implied volatility from 80% to 69%. This is what I promised you, and this is what I am delivering.

With 95.6% of the maximum potential profit, the risk/reward of continuing is no longer favorable. Besides, I want to take advantage of the many juicy short opportunities out there. Continuing with this position would be a needless waste of capital.

I wish they were all this easy.

As a result, you get to take home $1,380 or 13.64% in 10 trading days. Well done, and on to the next trade.

MicroStrategy is a highly leveraged long play on Bitcoin and at 70% implied volatility for its options.

Therefore, I am selling the MicroStrategy (MSTR) May 2025 $220-$230 in-the-money vertical bull call debit spread at $9.95 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 2 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 $9.95, $9.93, $9.91, $9.89, and $9.87. You should get done on some or all of these.

This was a bet that MicroStrategy would not fall below $230 by the May 16 option expiration in 18 trading days.

Here are the specific trades you need to close out this position:

Sell 12 May 2025 (MSTR) $220 calls at………………….....…$174.00

Buy to cover short 12 May 2025 (MSTR) $230 calls……….$164.05

Net Proceeds:………………………….……….………...................…$9.95

Profit: $9.95 - $8.80 = $1.15

(12 X 100 X $1.15) = $1,380 or 13.64% in 10 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.

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.