Trade Alert - (MSTR) May 8, 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.

SELL the MicroStrategy (MSTR) May 2025 $250-$260 in-the-money vertical bull call debit spread at $9.97 or best

Closing Trade

5-8-2025

expiration date: May 16, 2025

Portfolio weighting: 10% weighting

Number of Contracts = 13 contracts

The trade war is over. All the good news is in the price.

Well….not really.

The stock market has a good chance of peaking out in the next few days and testing new lows. Therefore, I am raising some dry powder here.

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

Since we added it 10 trading days ago, (MSTR) has appreciated some $159, or 61% above the nearest $260 strike price. We also caught a nice drop in option implied volatility from 101% to 67%. This is what I promised you, and this is what I am delivering.

With 98% 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 these. Continuing with this position would be a needless waste of capital.

I wish they were all this easy.

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

As a result, you get to take home $1,911 or 12.79% in 10 trading days. Well done, and on to the next trade.

Therefore, I am selling the MicroStrategy (MSTR) May 2025 $250-$260 in-the-money vertical bull call debit spread at $9.97 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 don’t want to sit in front of a screen all day or 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 $9.97, $9.95, $9.93, $9.91, and $9.89. You should get done on some or all of these.

This was a bet that MicroStrategy would not fall below $260 by the May 16 option expiration in 15 trading days.

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

Buy 13 May 2025 (MSTR) $250 calls at………………….…...$169.00

Sell short 13 May 2025 (MSTR) $260 calls at……………….$159.03

Net Proceeds:………………………….………….……....................$9.97

Profit: $9.97 - $8.50 = $1.47

(13 X 100 X $1.47) = $1,911 or 12.79% 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.

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