Trade Alert - (MSTR) April 22, 2025 - TAKE PROFITS - SELL
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 - (MSTR) - TAKE PROFITS
SELL the MicroStrategy (MSTR) May 2025 $400-$410 in-the-money vertical bear put debit spread at $9.00 or best
Closing Trade
4-22-2025
expiration date: May 16, 2025
Portfolio weighting: 10% weighting
Number of Contracts = 13 contracts
When a short position rises on terrible news, which we got today with Trump’s consideration of the firing of Jay Powell, you get the heck out of that position.
And even though (MSTR) shares did not go our way by rising, we did catch a huge decline in the implied volatility in the options, from 97% to 70% in only three trading days. This is one of the many reasons I trade through options spreads.
Crypto has so far failed miserably as a safety and diversification play, with gold up 30% and Bitcoin down 30% at the lows. But the “Sell America” trade is gaining steam, and money is now definitely moving into the crypto sector.
That’s why I am keeping my remaining long position in (MSTR).
Therefore, I am selling the MicroStrategy (MSTR) May 2025 $400-$410 in-the-money vertical bear put debit spread at $9.00 or best
As a result, you get to take home $650 or 5.88% in 3 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 10 cents with a second order.
If you live in a foreign time zone when the US stock market is closed, such as Australia, or don’t want to sit in front of a screen all day, simply enter a spread of Good-Until-Cancelled orders overnight, like $9.00, 8.90, $8.80, $8.70, and $8.60. You should get done on some or all of these.
This was a bet that MicroStrategy will not trade above $400 in 21 trading days.
Here are the specific trades you need to exit this position:
Sell 13 May 2025 (MSTR) $410 Puts at………………………….….…$90.00
Buy to cover short 13 May 2025 (MSTR) $400 Puts at…………..$81.00
Net proceeds:………………………….………………………….…...........…$9.00
Profit: $9.00 - $8.50 = $0.50
(13 X 100 X $0.50) = $650 or 5.88% in 3 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.
