Trade Alert - (SPY) September 18, 2020 - EXPIRATION-TAKE PROFITS
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) - EXPIRATION
EXPIRATION of the S&P 500 (SPY) September 2020 $360-$365 in-the-money vertical BEAR PUT spread at $5.00
Closing Trade - NOT FOR NEW SUBSCRIBERS
NOTE: NEW SUBSCRIBERS WILL RECEIVE A BATCH OF NEW TRADE ALERTS ONCE WE SEE A FAVORABLE ENTRY POINT IN THE MARKET.
8-27-2020
expiration date: September 18, 2020
Portfolio weighting: 10%
Number of Contracts = 23 contracts
Assuming that the (SPY) does not rise by more than $32.48, or 9.76%, by the close today, you will earn the maximum potential profit on this position. That works out to $1,840 or 19.04% in 15 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 will be credited to your account on Monday morning August 24 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
If you don’t see the cash show up in your account on Monday, get on the blower immediately and find it.
Well done and on to the next trade.
Yes, I know we are in a liquidity-driven bull market.
But even in those conditions, the market is astronomically overbought. When volatility is rising when the market is rising, you want to run a mile.
Stocks are now more expensive than they were in January, and the most expensive since the 2000 Dotcom Bubble top.
Government bailout money has dried up. What has been handed out has been done so incompetently. Only 6% of small companies were able to qualify for the Paycheck Protection Program. States are running out of money to pay unemployment benefits.
It’s right when the market appears unstoppable that it rolls over and dies.
If you have the bearish ProShares Ultra Short S&P 500 ETF (SDS), keep it as we are going lower into the election.
This was a bet that the S&P 500 (SPY) would not trade above $360.00 by the September 18 option expiration day in 15 trading days. That was up 14 (SPY) points, or $1,144 Dow Average points from there.
Here are the specific numbers you need to close out this position:
EXPIRATION of 23 September 2020 (SPY) $365 puts at…..........…$32.48
EXPIRATION of short 23 September 2020 (SPY) $360 puts at…....$27.48
Net Proceeds:…………….....................…………….………..………….….....$5.00
Profit: $5.00 - $4.20 = $0.80
(23 X 100 X $0.80) = $1,840 or 19.04% in 15 trading days.
