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 - (GOOGL) – BUY
BUY the Alphabet (GOOGL) May 2019 $1,100-$1,130 in-the-money vertical BULL CALL spread at $27.00 or up to $28
Opening Trade
4-30-2019
expiration date: May 17, 2019
Portfolio weighting: 10%
Number of Contracts = 4 contracts
Alphabet (GOOGL) delivered a rare earnings disappointment yesterday. A strong dollar has diluted its substantial foreign earnings which can account for 60% of total revenues.
I believe that the strong dollar is a temporary event and will only last until Europe and Japan stabilize their interest rates. In any case, Alphabet should grow beyond this drag, thus giving us an opportunity to get into one of the best technology stocks in the market at a discount.
Amazon has a near lock on the online advertising market, with its Google subsidiary owning a 63% market share among search engines. It is far and away the most visited site on the Internet. The company has a stunning $109 billion in cash on the balance sheet.
Therefore, I am buying the Alphabet (GOOGL) May 2019 $1,100-$1,130 in-the-money vertical BULL CALL spread at $27.00 or best.
Don't pay more than $28 or the risk-reward will tip against you.
If you don’t do options, buy the stock outright.
This is a bet that Alphabet (GOOGL) will not trade below $1,130 by the May 17 option expiration in 13 trading days.
Here are the specific trades you need to execute to obtain a $10,000 position:
Buy 4 April 2019 (GOOGL) $1,100 calls at………….………$90.00
Sell short 4 April 2019 (GOOGL) $1,130 calls at….……...$63.00
Net Cost:………………………….………..………….…................$27.00
Potential Profit: $30.00 - $27.00 = $3.00
(4 X 100 X $3.00) = $1,200 or 11.11%.
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.
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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.
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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.
