As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. This is your chance to ?look over? John Thomas? shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen.
Trade Alert – (MSFT) – Expiration
Expiration of the Microsoft (MSFT) July, 2014 $38-$40 in-the-money bull call spread at $2.00
expiration date: July 18, 2014
Portfolio weighting: 10%
Number of Contracts = 58 contracts
This is not a new trade, just the expiration of an existing one at its maximum profit point. The profit should be credited to your account as cash today, and the margin released.
This is a rare example where discretion was not the better part of valor this year. You would have made a lot more money buying the puts outright at $3.35 and letting them expire worth $6.69 than owning the Microsoft (MSFT) July, 2014 $38-$40 in-the-money bull call spread at $1.85. That?s even accounting for the extra $1.50 you made with the $40 puts you sold short going to zero.
But who knew that after spending a decade in the doldrums, (MSFT) would blast by more than $5, or some 11% to the upside, in just a month? Still, adding 87 basis points to your 2014 performance on a low risk trade is better than a poke in the eye with a sharp stick.
Here are the specific expiration values you need to close this position on your profit and loss statement:
Long 58 July, 2014 (MSFT) $38 calls at?????$6.69
Short 58 July, 2014 (MSFT) $40 calls at..????…$4.69
Profit: $2.00 – $1.85 = $0.15
(58 X 100 X $0.15) = $870 or 0.87% profit for the notional $100,000 portfolio.