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 – (GDX)- TAKE PROFITS
SELL the Van Eck Vectors Gold Miners ETF (GDX) September, 2017 $20.50-$21.50 in-the-money vertical BULL CALL spread at $0.99 or best
Closing Trade- NOT FOR NEW SUBSCRIBERS
expiration date: September 15, 2017
Portfolio weighting: 10%
Number of Contracts = 118 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 means the value of our position in the Van Eck Vectors Gold Miners ETF (GDX) September, 2017 $20.50-$21.50 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 93.33% of the maximum potential profit of this position.
So I am taking profits this morning. The risk reward of continuing is no longer favorable.
We earned a hefty 16.47% of this trade in only 12 trading days in this position, taking our August profit up to an amazing 19.14%.
I will plow the cash freed up into fresh positions in the same sector.
As I expected, gold and silver staged a major breakout on Monday, and blasted through to a new 2017 high.
This was a bet that the (GDX) wouldn’t move below $21.50 over the 24 trading days, compared to the then current $22.98.
As I write this, the (GDX) is trading at $24.53 or up 6.74%.
If you didn’t do options and bought the (GDX) outright, keep it. It is going higher as portfolio managers rush to protect their portfolios in the present uncertain and highly volatile conditions.
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 by clicking here at
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 118 September, 2017 (GDX) $20.50 calls at……………………..$4.10
Buy to cover short 118 September, 2017 (GDX) $21.50 calls…………….$3.11
Profit: $0.99 – $0.85 = $0.14
(118 X 100 X $0.14) = $1,652 or 16.47% in 12 trading days.