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 - (WYNN) – BUY
BUY the Wynn Resorts (WYNN) March 2020 $110-$115 in-the-money vertical Bear Put spread at $4.00 or best
Opening Trade
3-6-2020
expiration date: March 20, 2020
Portfolio weighting: 10%
Number of Contracts = 25 contracts
I am going to use induced 400-point intraday rally in the Dow Average to sell short again. And now I am also in the enviable position in that any short positions in the stock market are hedged by our long put options in the (VXX).
It is an old trading nostrum that if you throw good news on a stock, like we saw today, and it fails to rally, you sell the hell out of it.
The short-term outlook for the casino seems hopeless, with the global pandemic increasing by the day.
I am therefore buying the Wynn Resorts (WYNN) March 2020 $110-$115 in-the-money vertical Bear Put spread at $4.00 or best
To earn this much money on a spread 15% in-the-money with only 10 days to expiration is unimaginable, but that is the kind of trade that a (VIX) of $50 allows, today’s high.
To lose money on this trade, (WYNN) would have to rise above $110 in 10 days, a gain of 15% from today’s level.
This is a bet that Wynn Reports (WYNN will not trade above $110 by the March 20 option expiration day in 11 trading days.
Don’t pay more than $4.40 for this position or you’ll be chasing.
If you don’t do options stand aside.
Here are the specific trades you need to execute this position:
Buy 25 March 2020 (WYNN) $115 puts at………….…....……$21.00
Sell short 25 March 2020 (WYNN) $110 puts at………….….$17.00
Net Cost:……….............……………..…….………..………….….....$4.00
Potential Profit: $5.00 - $4.00 = $1.00
(25 X 100 X $1.00) = $2,500 or 25.00% in 10 trading days.
To see how to enter this trade in your online platform, please look at the order ticket above, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video on How to Execute Vertical Call and Put Debit Spreads by clicking here.
You must be logged into your account to view the video.
Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In today's market, investors need every advantage they can get.
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 close to expiration.
If you don't get done, don't worry. There are another 250 Trade Alerts coming at you over the coming 12 months.
