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 – (FXE)- TAKE PROFITS
SELL the Currency Shares Euro Trust (FXE) December, 2017 $111-$113 in-the-money vertical bull call spread at $1.86 or best
Closing Trade-NOT FOR NEW SUBSCRIBERS
expiration date: December 15, 2017
Portfolio weighting: 10%
Number of Contracts = 57 contracts
With the Fed decision on interest rates due out in hours, I am going to cut my risk and take a small profit in my long Euro (FXE) position.
I’d rather not second guess the market reaction to a 25-basis point hike in interest rates that everyone expects. Will the Euro rise, collapse, or do nothing?
We are much too close to our upper strike price of $113 to take this risk, so it is time to say hasta la vista baby!
That’s why I am going to sell my position in the Currency Shares Euro Trust (FXE) December, 2017 $111-$113 in-the-money vertical bull call spread at $1.86 or best.
The risk/reward of continuing the two days until the December 15expiration.
Always leave the last few cents of a move to the next guy.
Your profit on this trade works out to a modest $684, or 6.90%, in a mere ten trading days.
When you add in the $1,176 profit we took on from the Currency Shares Euro Trust (FXE) December 2017 $116-$118 in-the-money vertical bear put spread, we took in quite a substantial profit from the combined iron condor position, some 26.69%.
This take me to a rare 100% cash position. I will remain in cash until the start of 2018, unless something extraordinary presents itself over the holidays.
Well done, and on to the next trade.
Here are the specific trades you need to close out of this position:
Sell 57 December, 2017 (FXE) $111 calls at…………………………………………$2.44
Buy to cover short 57 December, 2017 (FXE) $113 calls at…………………..$0.58
Profit: $1.86 – $1.74 = $0.12
(57 X 100 X $0.12) = $684 or 6.90%
To see how to enter this trade in your online platform, please look at the order ticket above, 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 Vertical Call and Put Debit Spreads by clicking here.
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Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
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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 close to expiration.
If you don’t get done, don’t worry. There are another 250 Trade Alerts coming at you over the coming 12 months.