Trade Details & Summary

TLT Call Debit Spread (LIVE Closing Trade)

This quick fill on our directional call debit spread in TLT near the end of the trading day took us out with a $171 profit after patiently holding for a couple weeks.


More Discussion

Was This Helpful? Add Comments/Questions

Show Video Transcript +

Hey, everyone. This is Kirk here again and optionalpha.com. In this video, we're going to try to get out of our TLT call debit spread position. This is a position that's fascinating for me.

Did a video about this on our YouTube channel and also posted in the members' area because this is something that we got into assuming that the Fed wasn't going to raise interest rates. We knew they weren't.

They were some slight talk in the last two weeks or so that the Fed was going to raise interest rates. Here's a chart here of TLT so you can see what happened, but we got in here around 5, 10 or so, which is in this zone.

There was talk of the Fed raising interest rates in June, which I knew was complete garbage because people weren't including the fact that the Fed's notes or meeting notes that were released did not or actually came out before the Fed was able to see the jobs number in May.

They didn't know the jobs number in May was bad, hence that the June jobs number which we just got was also wrong as well. As a result, the market for bonds is now spiking higher as everyone realizes that the Fed is not going to raise rates at the June session, again, which we knew and we kind of played here.

That's been helpful for us. We had to hold through a little bit of a down move in TLT, but kind of take place from here knowing that eventually this things was going to play out. As we're looking at the position now, which again we got into here on 5, 10, so here's the trade.

We originally sold or bought this this for $93 a piece. They're now trading at about $150, which is right out of our 50% kind of profit target for this debit spread. Wrapped about $171 on this trade. We're going to try to get out of it today with 14 days to go until expiration.

This thing kind of moved exactly where we thought it would. Took a little bit of time obviously for that to come through, but now that it's the level that we believe that it's comfortable to take money off the table. We're going to go ahead and do that.

I entered the order at 150 to go ahead and exit this trade. Hopefully, we had filled here pretty soon. The market's been trading right around that 150 price point pretty much all day, so we'll see if we get filled here in the next couple of minutes.

Again, the price that we're going after is selling out of our call debit spread for $150 and you can see the mark right now is good at 150. We actually go in here to the June contracts, which is where our position is and then scroll down you can see there's lots of activity in these two contracts.

I don't think that there's going to be an issue in finding somebody. It's just going to be, can we get the appropriate price for what we're trying to get out of this thing. We'll pause this video and come back here in a little bit once we get filled. All right, so took a little bit of time here but we did eventually get filled on our TLT closing position.

Just a couple of minutes before the market close today, about 351 and we are out at the 150 credit that we had initially put in and so I'm working order. Sometimes, I guess, the moral of the story is here that you have to wait and be patient to get out of a position and let the market come to you.

That means we are out of the TLT position and took a nice big profit on the trade. As always, hope you guys enjoy this video. If you have any comments or questions, please ask them in the comments section right below. Until next time. Happy trading.

eBook Download

The "Ultimate" Options Guide

Ultimate Options Strategy Guide

The step-by-step guide on how to set up each of the top 18+ options strategies we trade to generate monthly income. Read the whole strategy guide in less than 30 mins and have it forever to reference.

Download PDF

Join More Than 47,345 Members

Membership is always free & you can upgrade anytime to unlock our live trades.