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 - (MSFT) - SELL
SELL the Microsoft (MSFT) June 2019 $110-$115 in-the-money vertical BULL CALL spread at $4.50 or best
Closing Trade
6-4-2019
expiration date: June 21, 2019
Portfolio weighting: 10%
Number of Contracts = 22 contracts
With all FANGs under anti-trust threat, now is no time to be leveraged long the sector.
I am therefore selling the Microsoft (MSFT) June 2019 $110-$115 in-the-money vertical BULL CALL spread at $4.50 or best, which is about my cost.
If you are a long term investor in the shares, keep them. (MSFT) easily has a double in it over the next three years. It is rapidly gaining market share in the burgeoning Internet cloud at the expense of leader Amazon (AMZN). (MSFT) has also successfully converted its business model from a one-time only software sale to an immensely profitable annual subscription service.
Its CEO Satya Nadella is a genius and is responsible for the turnaround of Microsoft over the last four years. We have already earned a double in the share price off the back of his Herculean efforts.
Here are the specific trades you need to exit a $10,000 position.
Sell 22 June 2019 (MSFT) $110 calls at….........……….………$12.00
Buy to cover short 22 April 2019 (MSFT) $115 calls at…......$7.50
Net Cost:………………………….………..………….….....................$4.50
Profit: $4.50 - $4.50 = $0.0
(22 X 100 X $0.00) = $0.
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 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.
