Trade Alert - (GS) February 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 AT MAX PROFIT

EXPIRATION of the Goldman Sachs (JPM) February 2021 $240-$250 in-the-money vertical Bull Call spread at $10.00

Closing Trade

2-19-2021– NOT FOR NEW SUBSCRIBERS

expiration date: February 19, 2021

Portfolio weighting: 10%

Number of Contracts = 12 contracts

This option call spread does not expire until the end of today. However, we are now a generous $62.59, or 25.03% above the upper $250 strike price.

Since we added this position, (GS) has appreciated by $35.81. As a result, you get to take home $1,440 or 13.63% in 12 trading days as long as (GS) does not fall by more than $62.15 today.

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, February 22 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 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 third peak. Total US deaths could exceed the 1919 Spanish Flu 625,000 peak by the time it is all over. We passed all WWII deaths sometime ago.

This was a bet that Goldman Sachs (GS) would not fall below $250 by the February 19 option expiration day in 13 trading days.

Here are the specific trades you need to close out this position:

EXPIRATION of 12 February 2021 (GS) $240 calls at……......…….…$72.59

EXPIRATION of Sell short 12 February 2021 (GS) $250 puts at…...$62.59

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

Profit: $10.00 - $8.80 = $1.20

(12 X 100 X $1.20) = $1,440 or 13.63% in 12 trading days.