Trade Alert - (GS) August 19, 2021 - EXPIRATION AT MAX PROFIT

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 - (GS) – EXPIRATION

EXPIRATION of the Goldman Sachs (GS) August 2021 $355-$365 in-the-money vertical Bull Call spread at $10.00

Closing Trade - NOT FOR NEW SUBSCRIBERS, YOUR TURN WILL COME

8-20-2021

expiration date: August 20, 2021

Portfolio weighting: 10%

Number of Contracts = 12 contracts

Since we are a full $48 in-the-money with this position, I think it is safe to call this one a win. So I am going to run the P&L today so we don’t have too many positions expiring at their maximum profit points tomorrow.

Since we added this position, shares of Goldman Sachs (GS) have rocketed by $39.66. That is miles away from the nearest $365.00 strike price for this position.

So, we get to take home the maximum profit in this position, such is the magic of vertical bull call debit spreads.

As a result, you get to take home $1,680 or 16.27% in 12 trading days.

Well done and on to the next trade!

You don’t have to do anything with this expiration.

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 August 23 and the margin freed up.

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

Goldman Sachs (GS) announced blockbuster earnings and the shares sold off big. It was a classic “Buy the rumor, sell the news” type move.

That gave us a gift. (GS) is the second-best company in the global brokerage sector, right after my former employer Morgan Stanley (MS).

I believe that massive government borrowing, and spending will drive US interest rates up through the roof and the value of the US dollar (UUP) down. Banks love high interest rates because they vastly improve profit margins.

Covid-19 is rapidly approaching its fourth peak with the delta virus. Total US deaths could exceed the 1919 Spanish Flu 625,000 peak by the fall. We passed all WWII deaths ages ago.

This is a bet that Goldman Sachs (GS) will not fall below $365.00 by the August 20 option expiration day in 12 trading days.

Here is the specific accounting you need to close out this position:

EXPIRATION of 12 August 2021 (GS) $355 calls at………$48.46

EXPIRATION of Sell short 12 August 2021 (GS) $365 calls at..$38.46
Net Proceeds:……………………..…….…..………….….....$10.00

Profit: $10.00 - $8.60 = $1.40

(12 X 100 X $1.40) = $1,680 or 16.27% in 12 trading days.