Trade Alert - (JPM) August 21, 2020 - EXPIRATION-TAKE PROFITS
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 - (JPM) –EXPIRATION
EXPIRATION of the JP Morgan (JPM) August 2020 $92-$95 in-the-money vertical Bull Call spread at $3.00
Closing Trade - NOT FOR NEW SUBSCRIBERS
8-21-2020
expiration date: August 21, 2020
Portfolio weighting: 10%
Number of Contracts = 40 contracts
Provided that JP Morgan Chase does not drop below $95.00 over the next 30 minutes, you are about to earn the maximum potential profit on the JP Morgan (JPM) August 2020 $92-$95 in-the-money vertical Bull Call spread at $3.00.
That means you will get to take home $1,600, or 15.38% in 9 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 24 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
If you don’t see the cash show up in your account on Monday, get on the blower immediately and find it.
This cycle of COVID-19 infections is imminently going to peak out and start declining, at least for the short term.
As a result, I believe the core long FANG trade is long overdue for a break. Instead, I think we are about to witness a major rotation into domestic economic “recovery” stocks. Stocks will keep going up, but the leadership will change. Bonds and gold are also due for profit-taking.
There is no better domestic recovery plan than the big banks. During a recovery, they will benefit from steeply rising interest rates, fewer defaults, yet continued government subsidies. The crown jewel of the American banking system in JP Morgan Chase Bank.
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Stock players should keep the shares, which probably have a double in them over the next three years.
This was a bet that JP Morgan (JPM) would not trade below $95.00 by the August 21 option expiration day in 9 trading days
Here are the specific trades you need to exit this position:
EXPIRATION of 40 August 2020 (JPM) $92 calls at……..…….$5.15
EXPIRATION of short 40 August 2020 (JPM) $95 puts at…...$2.15
Net Proceeds:…………….....………..…….………..………….……......$3.00
Profit: $3.00 - $2.60 = $0.40
(40 X 100 X $0.40) = $1,600, or 15.38% in 9 trading days.
