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 – (ABX)- TAKE PROFITS
SELL the Barrick Gold (ABX) September, 2017 $15-$16 in-the-money vertical BULL CALL spread at $0.99 or best
Closing Trade-NOT FOR NEW SUBSCRIBERS
8-29-2017
expiration date: September 15, 2017
Portfolio weighting: 10%
Number of Contracts = 125 contracts
There is panic buying this morning of gold, silver, the miners shares, and the ETF’s which we happen to own quite a few of.
That’s what I love; panic buying of my longs. It is music to a trader’s ears, even one who has been at it for a half century. This is why I get up in the morning.
That means the value of our position in the Barrick Gold (ABX) September, 2017 $15-$16 in-the-money vertical BULL CALL spread is soaring.
I have to thank North Korea’s Kim Jong Il for the move for firing a ballistic missile at Japan, which fortunately broke up half way over the sea.
Whenever the North Korean dictator gets trigger happy, the precious metals do extremely well.
Using this morning’s prices, we can now reap 95.00% of the maximum potential profit.
The risk reward of continuing is no longer favorable.
We earned a hefty 23.75% n this trade in a mere 11 trading days in this position, taking our August profit up to an amazing 19.14%.
I will plow the cash freed up into new positions in the precious metals.
If you didn’t do options and bought the (ABX) outright, keep it. It is going higher as portfolio managers rush to protect their portfolios in the present uncertain and highly volatile conditions.
This was a bet that Barrick Gold (ABX) won’t move below $16.00 over the next 23 trading days, compared to the then current $16.80. As I write, it is now trading at $17.85, or up 10.50%.
It is going higher as portfolio managers rush to protect their portfolios in the present uncertain and highly volatile conditions.
This is an example of how a trade can go perfectly.
The fundamentals, the technicals, the sector rotation, and the geopolitical backdrop all worked in our favor at the same time, delivering a near instant winner.
Well done, and on to the next trade.
To see how to enter this trade in your online platform, please look at the order ticket below, 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 A Vertical Bull Call Spread clicking here at
http://members.
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.
Here are the specific trades you need to execute this position:
Sell 125 September, 2017 (ABX) $15 calls ……………………………………………$2.90
Buy to cover short 125 September, 2017 (ABX) $16 calls at………………………$1.91
Net Proceeds:……………………………………………………………………………………..$0.99
Profit: $0.99 – $0.80 = $0.19
(125 X 100 X $0.19) = $2,375 or 23.75% in 11 trading days.
