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 - (DIS) - BUY
BUY the Walt Disney (DIS) September 2019 $115-$120 in-the-money vertical BULL CALL spread at $4.50 up to $4.75
Opening Trade
8-20-2019
expiration date: September 20, 2019
Portfolio weighting: 10%
Number of Contracts = 22 contracts
I am going to use the drop this morning to dive back into Walt Disney shares.
There is a report this morning from an internal accountant fired two years ago that Walt Disney has been exaggerating revenues for the past 18 years. I don’t buy it. Disney is no General Electric, and certainly not an Enron.
I am therefore buying the Walt Disney (DIS) September 2019 $115-$120 in-the-money vertical BULL CALL spread at $4.50 or best.
Don’t pay more than $4.75 or the risk/reward will go against you.
This is a bet that the Walt Disney (DIS) will not trade below $120.00 by the September 20 option expiration day in 18 trading days.
If you don’t do options, buy the stock which will be great to own in front of the Disney Plus online streaming roll out at the end of the year.
Here are the specific trades you need to execute this position:
Buy 22 September 2019 (DIS) $115 calls at………….………$21.00
Sell short 22 September 2019 (DIS) $120 calls at………….$16.50
Net Cost:………….............……………….………..………….….....$4.50
Potential Profit: $5.00 - $4.50 = $0.50
(22 X 100 X $0.50) = $1,100 or 11.11% in 18 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.
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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.
