• support@madhedgefundtrader.com
  • Member Login
Mad Hedge Fund Trader
  • Home
  • About
  • Store
  • Luncheons
  • Testimonials
  • Contact Us
  • Click to open the search input field Click to open the search input field Search
  • Menu Menu

Trade Alert - (AMZN) December 18, 2020 - TAKE PROFITS-EXPIRATION

Tech Alert

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.


Alert

 

Tech Alert - Amazon.com, Inc. (AMZN) - EXPIRATION-TAKE PROFITS

EXPIRATION of the Amazon.com, Inc. (AMZN) December 2020 $2,940-$2,950 in-the-money vertical BULL call spread at $10.00

Closing Trade

12-18-2020

expiration date: December 18, 2020

Portfolio weighting: 10%

Number of Contracts = 12 contracts

 

This options call spread does not expire until end of today, but I am just giving readers a heads-up.

This was a short-term trade that underlying shares of Amazon (AMZN) would stay above $2,950 by the December 18th expiration date.

I thought Amazon shares would benefit from positive headlines about the domination of their e-commerce business going into 2021 and I was absolutely correct.  

With AMZN being the e-commerce market share leader, I thought it was the biggest beneficiary of the shelter-at-home trend which we are seeing again with the virus spreading like wildfire across the continental U.S.

About 69% indicated they’d use Amazon the same as they did during the pandemic, which is when Amazon’s demand spiked, while another 15% said they would shop on the site even more.

Of those surveyed, 44% stated that 50%-100% of their holiday shopping had already been completed and mostly done on Amazon.

Amazon had been trending sideways the past month and I was willing to bet that shares would hold up in the short-term through the holiday season and that is exactly what happened.

I used a short-term dip in shares to execute a deep-in-the-money call spread on Amazon and if Amazon doesn’t drop by 8.9% or 287 points at today's market close, this trade will expire with maximum profits.

You don’t have to do anything with this expiration – just watch it expire at tomorrow’s close and reap maximum profit.

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, December 21 and the margin freed up.

Some firms charge you a modest $10 or $15 fee for performing this service.

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

Expiration of 12 December 2020 (AMZN) $2,940 calls at………….………$296.75

Expiration of 12 December 2020 (AMZN) $2,950 calls at…….........…….$286.75

Net Proceeds:……………………..…….………..……........................................$10.00

Profit: $10 - $8.33= $1.67

(12 X 100 X $1.67) = $2,004 or 20.04% in 19 days

 

Share this entry
  • Share on Facebook
  • Share on X
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share by Mail
https://www.madhedgefundtrader.com/wp-content/uploads/2016/02/Alert-e1457452190575.jpg 135 150 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2020-12-18 12:52:322020-12-18 12:56:33Trade Alert - (AMZN) December 18, 2020 - TAKE PROFITS-EXPIRATION

tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Mad Hedge Fund Trader (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade. 

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.

Copyright © 2025. Mad Hedge Fund Trader. All Rights Reserved. support@madhedgefundtrader.com
  • Privacy Policy
  • Disclaimer
  • FAQ
Link to: December 18, 2020 Link to: December 18, 2020 December 18, 2020 Link to: December 21, 2020 - MDT Pro Tips Link to: December 21, 2020 - MDT Pro Tips December 21, 2020 - MDT Pro Tips
Scroll to top