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.
Tech Trade Alert - Twitter, Inc. (TWTR) – EXPIRATION
EXPIRATION of Twitter, Inc. (TWTR) November 2020 $37-$40 in-the-money vertical BULL CALL spread at $3.00
Closing Trade - NOT FOR NEW SUBSCRIBERS
11-20-2020
expiration date: November 20, 2020
Portfolio weighting: 10%
Number of Contracts = 37 contracts
Provided that Twitter shares don’t drop more than 11% by the end of the day, you will realize the maximum potential profit in the Twitter November 2020 $37-$40 in-the-money vertical Bull Call spread at $3.
Congratulations! You made $1,295 or 12.95% in 14 days
Well done and on to the next trade!
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 November 23 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
The logic behind this trade was very simple.
The opening up of the economy isn’t priced into tech shares yet and Twitter is exposed to digital marketing revenue which is reliant on the overall health of the U.S. economy.
This is why shares held up when other tech companies have struggled in the short-term.
Here are the specific trades you need to exit this position:
Expiration of 37 November 2020 (TWTR) $37 calls at………….…….…$7.92
Expiration of short 37 November 2020 (TWTR) $40 calls at………….$4.92
Net Proceeds:…………............................…………..…….………..…….......$3.00
Profit: $3.00 - $2.65 = $.35
(37 X 100 X $.35) = $1,295 or 12.95% in 14 days
