Trade Alert - (JPM) July 16, 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 - (JPM) – EXPIRATION AT MAX PROFIT

EXPIRATION of the JP Morgan (JPM) July 2021 $140-$145 in-the-money vertical Bull Call spread at $5.00

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

Trade Date: 7-16-2021

Expiration Date: July 16, 2021

Portfolio weighting: 10%

Number of Contracts = 24 contracts

Since we added this position, shares of JP Morgan (JPM) have risen by a mere $0.60. That is miles away from the nearest $145.00 strike price for this position.

Yet, we get to take home the maximum profit in this position, such is the magic of vertical bull call debit spread. Bets that stocks will do absolutely nothing can be immensely profitable.

As a result, we are now a very safe $8.22 cushion to take us into the option expiration at the end of today. I think it’s safe to call it a win. Therefore, you will get to take home $960 or 8.70% in 8 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 July 19 and the margin freed up.

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

My target for (JPM) this year is $200, up 32%.

Tech has been on a tear for two months now, and banks have been beaten senseless.

The next big rotation in the markets will be for tech and bonds to peak out and for financials to bounce hard off a bottom. This will result from coming major upgrades in economic growth, which analysts and strategists are wildly underestimating.

As soon as everyone gets the parts and labor they want, it is going to be off to the raises. Add to that a Fed taper on monetary stimulus and interest rates will soar. At the very least, they have to stop stimulating the housing market with $40 billion a month's worth of mortgage-backed securities.

Bank shares have been joined at the hip with interest rates for the past nine months, and I believe that both rates and bank shares have much higher to go. With $10 trillion in new government spending about to be approved, but not funded, it can’t go any other way.

An upside breakout in the bank shares is therefore in the cards.

That has given us a gift. (JPM) is the class act in the global banking sector, and CEO Jamie Diamond is the best CEO in the country.

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.

This was a bet that JP Morgan (JPM) would not fall below $145 by the July 16 option expiration day in 8 trading days.

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

EXPIRATION of July 2021 (JPM) $140 calls at……....…….…$13.22

EXPIRATION of short 24 July 2021 (JPM) $145 calls at…....$8.22

Net Proceeds:……………………..….......….………..………….….....$5.00

Profit: $5.00 - $4.60 = $0.40

(24 X 100 X $0.40) = $960 or 8.70% in 8 trading days.