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 - (QQQ) – TAKE PROFITS
SELL the Invesco QQQ Trust NASDAQ ETF (QQQ) March 2021 $325-$330 in-the-money vertical BEAR PUT spread at $4.60 or best
Closing Trade– NOT FOR NEW SUBSCRIBERS, YOUR TURN WILL COME
expiration date: March 19, 2021
Portfolio weighting: 10%
Number of Contracts = 24 contracts
I am going to use the massive $8 dive in the (QQQ) this morning prompted by another interest rate spike to cover my highest risk short position. With the options expiration only five days off, we are sailing too close to the wind to keep this position.
By coming out here, you get to take home $480, or 4.54% in 10 trading days. You also hedged out a major part of your risk in a market that was collapsing into this week.
Well done, and on to the next trade!
I am therefore selling the Invesco QQQ Trust NASDAQ ETF (QQQ) March 2021 $325-$330 in-the-money vertical BEAR PUT spread at $4.60 or best
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
This is a bet that the Invesco QQQ Trust NASDAQ ETF S&P 500 (QQQ) will not trade above $325.00 by the March 19 option expiration day in 10 trading days. If the market gets that high in 11 days, you will think you have died and gone to heaven.
Here are the specific trades you need to exit this position:
Sell 24 March 2021 (QQQ) $330 puts at……….....….………$17.00
Buy to cover short 24 March 2021 (QQQ) $325 puts at….$12.40
Profit: $4.60 - $4.40 = $0.20
(24 X 100 X $0.20) = $480 or 4.54% in 10 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.