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 - (MSFT) – TAKE PROFITS
SELL the Microsoft (MSFT) December 2023 $320-$330 in-the-money vertical Bull Call spread at $9.95 or best
Closing Trade
12-6-2023
expiration date: December 15, 2023
Portfolio weighting: 10%
Number of Contracts = 11 contracts
If you don’t do options, buy the stock. My target for (MSFT) for 2024 is $450, up 20%. I expect (MSFT) to hit a new all-time high before yearend.
There is nothing like a 15.6% move in stock since we added this position to ring the cash register. My bet that the investors would flock to the safest big tech stock in the market going into yearend proved correct.
But with 95.00% of the maximum profit in hand, I am going to take the money and run. The markets have had a heck of a run.
The risk/reward of continuing is no longer favorable with only seven trading days left until the December 15 option expiration. Better to raise cash to pour it into another new position. This position is now a respectable 12.72% in-the-money.
(MSFT) is the new safe stock in the market, thanks to the accelerated growth of its Azure cloud business. It is an American multinational technology company headquartered in Redmond, WA. Microsoft's best-known software products are the Windows line of operating systems, the Microsoft 365 suite of productivity applications, and the Edge web browser.
Its flagship hardware products are the Xbox video game consoles and the Microsoft Surface lineup of touchscreen personal computers. Microsoft ranked No. 14 in the 2022 Fortuna 500 rankings of the largest United States corporations by total revenue. It was the world's largest software by revenue as of 2022.
I am therefore selling the Microsoft (MSFT) December 2023 $320-$330 in-the-money vertical Bull Call spread at $9.95 or best.
As a result, you get to take home $1,045 or 10.56% in 20 trading days. Well done and on to the next trade.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and lower your offer by 2 cents with a second order.
This was a bet that Microsoft (MSFT) would not fall below $330 by the December 15 option expiration day in 7 trading days. For more about (MSFT) please click here for their website.
Here are the specific trades you need to close out this position:
Sell 11 December 2023 (MSFT) $320 calls at………….…........……$53.00
Buy to cover short 11 December 2023 (MSFT) $330 calls at…....$43.05
Net Proceeds:………………..……..…….………..……….............….….....$9.95
Profit: $9.95 - $9.00 = $0.95
(11 X 100 X $0.95) = $1,045 or 10.56% in 7 trading days.
If you are uncertain on 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.
