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) December 2019 $1,200-$1,230 in-the-money vertical BULL CALL spread at $25.00 or best
Opening Trade
11-20-2019
expiration date: December 20, 2019
Portfolio weighting: 10%
Number of Contracts = 4 contracts
I am going to use the big selloff this morning to dive back into Alphabet, which I haven’t been able to own because the price hasn’t pulled back.
This is one of the dominant cloud players whose share price has been temporarily beaten down because of unwarranted fears of regulation and antitrust action. Most congressmen don’t even know what Alphabet does.
I believe the 50-day moving average at $1251.88 will provide major support over the next month or so.
I am therefore buying the Alphabet (GOOGL) December 2019 $1,200-$1,230 in-the-money vertical BULL CALL spread at $25.00 or best
Don’t pay more than $27.00 or the risk/reward will go against you.
This is a bet that Alphabet (GOOGL) will not trade below $1,230 by the December 20 option expiration day in 22 trading days.
If you don’t do options, buy the stock outright. This is a chance to get into one of the preeminent cloud plays at a bargain price.
Here are the specific trades you need to execute this position:
Buy 4 December 2019 (GOOGL) $1,200 calls at….……….…$102.00
Sell short 4 December 2019 (GOOGL) $1,230 calls at……….$77.00
Net Cost:………………………….…...............……..………….….....$25.00
Potential Profit: $30.00 - $25.00 = $5.00
(4 X 100 X $5.00) = $2,000 or 20.00% in 22 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.
