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) October 2019 $1,100-$1,130 in-the-money vertical bull call spread at $26.00 up to $28.00
Opening Trade
10-3-2019
expiration date: October 18, 2019
Portfolio weighting: 10%
Number of Contracts = 4 contracts
I believe that the antitrust action against Alphabet will go absolutely nowhere. It’s impossible to make a monopoly case against a company that gives away its service for free.
If the company is broken up, the individual pieces would be worth twice as much as the company is today. With a dominant 92% share in online search and a 35% share in online advertising, Alphabet will continue to prosper and grow as far as the eye can see.
What the antitrust talk HAS done is giving us a great entry point for the stock down 7.2% from the recent high.
I am therefore buying the Alphabet (GOOGL) October 2019 $1,100-$1,130 in-the-money vertical bull call spread at $26.00 or best.
Don’t pay more than $28.00 or the risk/reward will go against you.
This is a bet that the Alphabet (GOOGL) will not trade below $1,130 by the October 18 option expiration day in 11 trading days. An extremely short time to expiration gives us a very high chance of making money here.
If you don’t do options, start accumulating shares for a long term hold.
Here are the specific trades you need to execute this position:
Buy 4 October 2019 (GOOGL) $1,100 calls at………………$94.00
Sell short 4 October 2019 (GOOGL) $1,130 calls at….….$68.00
Net Cost:…………………………...........………..………….….....$26.00
Potential Profit: $30.00 - $26.00 = $4.00
(4 X 100 X $4.00) = $1,600 or 15.38% in 11 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.
