Trade Alert - (WPM) January 20, 2023 - EXPIRATION AT MAX PROFIT
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 - (WPM) – EXPIRATION AT MAX PROFIT
EXPIRATION of the Wheaton Precious Metals (WPM) January 2023 $36-$39 in-the-money vertical Bull Call spread at $3.00
Closing Trade
1-20-2023
expiration date: January 20, 2023
Portfolio weighting: 10%
Number of Contracts = 40 contracts
Since (WPM) shares for this spread are now an astounding $3.08, or 25.11% in the money, I think it’s safe to call this one a win even though we have several more hours until expiration. We only needed (WPM) to be $3.00 in-the-money, or above $39 to get the maximum profit.
We have the good fortune to have six options positions expiring at their maximum profit points at 4:00 PM today. So, you don’t get overwhelmed by getting six trade alerts all at once, I will start feeding them out now.
As a result, you get to take home $1,600, or 15.38% in 12 trading 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 on Monday morning, January 23 and the margin freed up.
Some firms charge you a modest $10 or $15 fee for performing this service.
Stock players keep the (WPM) shares, which probably have a double in them over the next two years.
With the world looking for a “safe” trade, it is time to pour into precious metals. The Bitcoin bubble had been stealing their thunder until now is gone forever.
Wheaton Precious Metals Corp. is a multinational precious metals dividend streaming company, also known as a royalty trust. It indirectly produces over 26 million ounces a year via short term options and contracts with mining companies all over the world, including Mexico, Portugal, The US, Chile, and Peru. It is, in effect, the best leveraged play on silver out there.
To learn more about the operation of Wheaton Precious Metals Corp, please visit their site by clicking here at https://www.wheatonpm.com/Home/
Silver is a great industrial play and if you believe in the global economic recovery you want to be loading the boat.
It is used in electronics and solar panels, which are about to get a big boost from the new president. Every Tesla requires 20 pounds of silver, which will increase more production next year by 40% from 1.3 million to 1.8 million units.
And yes, it is still used for jewelry, which gets bought more during economic recoveries.
Silver tends to lag gold, which has already started to move. When it plays catch-up it rises twice as fast as gold.
This was a bet that the Wheaton Precious Metals (WPM) would not fall below $39 by the Janaury 20 option expiration day in 11 trading days.
Here is the specific accounting you need to close this position:
EXPIRATION of 40 January 2023 (WPM) $36 calls at….......……$9.08
EXPIRATION of short 40 January 2023 (WPM) $39 calls at......$6.08
Net Proceeds:……………………..…….………..………..............….….....$3.00
Profit: $3.00 - $2.60 = $0.40
(40 X 100 X $0.40) = $1,600, or 15.38% in 12 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.
