Trade Alert - (QQQ) March 19, 2021 - EXPIRATION AT MAX PROFIT

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.

 

Since we added this position, (QQQ) shares have fallen only $11.86, or 3.6%. The great thing about in-the-money put spreads is that the underlying stock can go down, sideways, or up small and you still get to make the maximum profit.

Therefore, you will get to take home $1,440 or 13.63% in 10 trading days.

You don’t have to do anything with this expiration.

Your broker (are they still called that?) will automatically use your long position to cover your short position, canceling out the total holdings.

The entire profit should be credited to your account today, March 22 and the margin freed up.

Some firms charge you a modest $10 or $15 fee for performing this service.

I added this position to hedge our existing long positions. It worked immediately. As long as volatility remains high in tech stocks, I will continue to sell rallies in the (QQQ).

This was a bet that the Invesco QQQ Trust NASDAQ ETF S&P 500 (QQQ) would not trade above $330.00 by the March 19 option expiration day in 10 trading days.

Here are the specific trades you need to close out this position:

EXPIRATION of 24 March 2021 (QQQ) $335 puts at…….......……………$21.86

EXPIRATION to cover short 24 March 2021 (QQQ) $330 puts at....….$16.86

Net Proceeds:……………………................…….………..……………….….….....$5.00

Profit: $5.00 - $4.40 = $0.60

(24 X 100 X $0.60) = $1,440 or 13.63% in 10 trading days.