Trade Alert – (TLT) May 21, 2025 – STOP LOSS – 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 – (TLT) – STOP LOSS
SELL the iShares Barclays 20+ Year Treasury Bond Fund (TLT) June 2025 $80-$83 in-the-money vertical Bull Call debit spread at $2.30 or best
Closing Trade
5-21-2025
expiration date: June 20, 2025
Portfolio weighting: 10%
Number of Contracts = 40 contracts
The prospect of a House bill that could add up to $16 trillion to the national debt over the next 4-10 years has sent all asset classes into free fall, except for gold.
If (TLT) doesn’t hold here, ten-year US Treasury yields could rocket from today’s 4.6% to 5.0%. That would take (TLT) below $80. I have serious profits to protect this year, and the risk/reward of continuing with this position with 21 trading days to expiration is no longer favorable.
I am therefore selling the iShares Barclays 20+ Year Treasury Bond Fund (TLT) June 2025 $80-$83 in-the-money vertical Bull Call debit spread at $2.30 or best.
If you don’t want to sit in front of a computer 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 $2.30, $2.25, $2.20, $2.15, and $2.10. You should get done on some or all of these.
This was a bet that the (TLT) will not fall below $83.00 by the June 20 option expiration in 33 trading days.
Here are the specific trades you need to close out this position:
Sell 40 June 2025 (TLT) $80 calls at………….…………..……….$7.30
Buy to cover short 40 June 2025 (TLT) $83 calls at………..…$5.00
Net Proceeds:………………………….……….…………………………..$2.30
Loss: $2.50 – $2.30 = -$0.20
(40 X 100 X -$0.20) = $800.
It’s now the Opening Act for the Bond Market
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.
