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 – (SPY)- TAKE PROFITS
SELL the SPDR S&P 500 ETF (SPY) April, 2017 $227-$230 in-the-money vertical bull call spread at $2.98 or best
Expiration Date: April 21, 2017
Portfolio Weighting: 10%
Number of Contracts = 38 contracts
I’ll take the win on this one.
At $2.98 we have captured 94.29% of the maximum potential profit in the position.
A 12.54% profit in 15 trading days is good enough for me, especially when everyone else is losing their shirt.
Notice that I made money both on the long and the short side in the SPY this month.
That’s how you play this kind of market.
If you don’t sit down when the music stops playing you lose the game.
If you’re not happy with $2.98 and want to keep the full $3.00, run the position into the Friday options expiration. You have $4.57 worth of safety cushion.
Your account will be automatically credit with the full $3.00 on Monday morning and your margin will be freed up.
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of OptionsHouse.
If you are uncertain about how to execute this options spread, please watch my training video “How to Execute a Vertical Bull Call Spread”.
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 with only 2 days to expiration.
Please keep in mind these are ballpark prices at best. After the text alerts go out, prices can be all over the map. There is no telling how much the market will have moved by the time you get this email.
Paid subscribers, be sure you’ve signed up for our FREE text service for Trade Alerts. When seconds count, this feature offers a definite trading advantage. In today’s volatile markets, individual investors need every advantage they can get.
Here Are the Specific Trades You Need to Execute This Position:
Sell 38 April, 2017 SPY $227 calls at…….….……$7.80
Buy to cover short 38 April, 2017 SPY $230 calls at……….$4.82
Profit: $2.98 – $2.65 = $0.33
(38 X 100 X $0.33) = $1,254 or 12.45% profit in 15 trading days.