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 – (X) TAKE PROFITS
SELL the US Steel (X) September, 2017 $21-$22 in-the-money vertical BULL CALL spread at $0.99 or best
Closing Trade- NOT FOR NEW SUBSCRIBERS
expiration date: September 15, 2017
Portfolio weighting: 10%
Number of Contracts = 116 contracts
Everything I predicted would happen to the steel industry played out as I expected… except that it took only 10 trading days instead of months.
Import relief through punitive duties moved forward.
North Korean threats increase the prospect of military demand.
What was unexpected as that Tropical Storm Harvey devastated much of greater Houston, creating new demand for millions of tons of US steel.
Yes, you just got one of the largest infrastructure projects in history without any action from congress.
As a result, US Steel (X) shares rocketed.
I am therefore taking profits in my position in the US Steel (X) September, 2017 $21-$22 in-the-money vertical bull call spread.
With 92.86% of the maximum potential profit in hand, the risk/reward of continuing is no longer favorable.
It’s not worth a penny to carry on for 11 more trading days.
Always leave the last 10% of a move for the next guy.
This was a bet that US Steel (X) would not trade below $22 by theSeptember 15 options expiration in 22 trading days. As I write this, (X) trading at $26.55, up from the $24.80 at the opening alert, a gain of 7.05%.
To see how to enter this trade in your online platform, please look at the order ticket below, 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 a Vertical Bull Call Spread by clickking here at
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.
Here are the specific trades you need to execute this position:
SELL 116 September, 2017 (X) $21 calls at…………………………$5.80
Buy to cover short 116 September, 2017 (X) $22 calls at...$4.81
Profit: $0.99 – $0.86 = $0.13
(116 X 100 X $0.13) = $1,508 or 15.12% in 10 trading days.