Trade Alert – (SPY) June 9, 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 – (SPY) – TAKE PROFITS

SELL the S&P 500 (SPY) June 2025 $630-$640 in-the-money vertical bear put debit spread at $9.95 or best

Closing Trade

6-9-2025

expiration date: June 20, 2025

Portfolio weighting: 10% weighting

Number of Contracts = 12 contracts

The market has just seen one of the sharpest moves up in History. But it didn’t go up fast enough.

As a result, we now have 97.3% of the maximum potential profit in hand. The risk/reward of continuing eight more trading days is no longer favorable. In addition, the Mad Hedge AI Market Timing Index is at a high 63, meaning it’s time to sell.

The S&P 500 is now facing a major double top risk. Unless we break out to the upside soon, we are bound to retrace half the recent gains.

This was a bet that the stock market would not hit a new all-time high in the next 26 trading days, a period of time when the market usually tops out. Sounds like a no-brainer, doesn’t it? Heard of “Sell in May and Go Away?”

The truly disappointing thing about the recent rally is that it has made stocks expensive once again. In valuation terms, we are now back at February’s peak earnings multiple of 22X for the S&P 500, up from 18X a month ago. This is happening because the growth rate of earnings is falling while share prices are rising.

We are now facing record-high share prices in an economy going into a recession, DOGE cutting chunks of government spending, with rising unemployment and inflation, and a budget deficit for 2025 that is likely to hit $4-$5 trillion.

It doesn’t sound like a great bargain to me. Maybe that’s why only 26% of investors are currently bullish.

Therefore, I am selling the S&P 500 (SPY) June 2025 $630-$640 in-the-money vertical bear put debit spread at $9.95 or best

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 2 cents with a second order.

If you don’t want to sit in front of a screen all day or 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 $9.95, $9.93, $9.91, and $9.89. You should get done on some or all of these.

This was a bet that the S&P 500 (SPY) would not trade above $630 in 25 trading days.

Here are the specific trades you need to exit this position:

Sell 12 June 2025 (SPY) $640 puts at…………………………..….$40.00

Buy to cover short June 2025 (SPY) $630 puts at……………..$30.05

Net Proceeds:……………………………………………..……………….…$9.95

Profit: $9.95 – $8.50 = $1.45

(12 X 100 X $1.45) = $1,740 or 17.05% in 17 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.