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) – BUY
BUY the JP Morgan (JPM) July 2021 $140-$145 in-the-money vertical Bull Call spread at $4.60 or best
Trade Date: 7-6-2021
Expiration Date: July 16, 2021
Portfolio weighting: 10%
Number of Contracts = 24 contracts
If you don’t do options, buy the stock. My target for (JPM) this year is $200, up 32%.
I told you I’d be back in this name. It’s time to dip your toe back in the banks.
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.
I am therefore buying the JP Morgan (JPM) July 2021 $140-$145 in-the-money vertical Bull Call spread at $4.60 or best.
Don’t pay more than $4.70 or you’ll be chasing.
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 is a bet that JP Morgan (JPM) will not fall below $145 by the July 16 option expiration day in 8 trading days.
Here are the specific trades you need to execute this position:
Buy 24 July 2021 (JPM) $140 calls at………….………$13.00
Sell short 24 July 2021 (JPM) $145 calls at….……....$8.40
Net Cost:……………………..…….………..………….….......$4.60
Potential Profit: $5.00 - $4.60 = $0.40
(24 X 100 X $0.40) = $960 or 8.70% in 8 trading days.
If you are uncertain about how to execute an options spread, please watch my training video by clicking here.
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.
