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 - (V) – EXPIRATION AT MAX PROFIT
EXPIRATION of the Visa (V) October 2022 $160-$170 in-the-money vertical Bull Call spread at $10.00
Closing Trade
10-21-2022
expiration date: October 21, 2022
Number of Contracts = 12 contracts
We have the good fortune to have four options positions expiring at their maximum profit points at 4:00 PM on Friday, October 21. So you don’t get overwhelmed by getting four trade alerts at once, I will start feeding them out now.
With one more day to go, this position is now 10.47% above its nearest strike price. It is safe to call this a win.
As a result, you get to take home $1,440, or 13.64% in 10 days.
Well done and on to the next trade.
You don’t have to do anything with this expiration.
Your broker 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 Monday morning, October 24 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
Visa is the world’s largest credit card company. It is highly sensitive to any recovery in the economy, which feeds straight into more fee income.
After two down quarters, Q3 likely came in at a 2.0% growth rate. Visa is also a huge beneficiary of inflation, as it raises prices and fees faster.
To learn more about the company, please visit their website at https://usa.visa.com.
This was a bet that Visa would not fall below $170 by the October 21 options expiration in 10 days.
Here is the specific accounting you need to close out this position:
EXPIRATION of long 12 October 2022 (V) $160 calls at………….…$28.27
EXPIRATION of short 12 October 2022 (V) $170 calls at……...……$18.27
Net Proceeds:…………………………...…………………..................….....$10.00
Profit: $10.00 - $8.80 = $1.20
(12 X 100 X $1.20) = $1,440, or 13.64% in 10 days.
