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 - (UPS) – BUY
BUY the UPS (UPS) November 2020 $130-$140 in-the-money vertical Bull Call spread at $8.70 or best
Opening Trade
11-2-2020
expiration date: November 20, 2020
Portfolio weighting: 10%
Number of Contracts = 13 contracts
When the US economy recovers, you suddenly have to move a lot more stuff. The overnight package delivery companies are another great beneficiary of this coming upsurge.
UPS is one of three overnight couriers, including FedEx (FDX) and the US post Office, and only the former is publicly listed.
Note that I have been clever here by picking an upper $140 strike. That is right where we get enormous technical support from a double bottom on the charts that stretch back to June.
If we break that, I will stop out of this position so fast it will make your head spin, given these uncertain times.
I am therefore buying the UPS (UPS) November 2020 $130-$140 in-the-money vertical Bull Call spread at $8.70 or best.
Don’t pay more than $9.20 or you’ll be chasing.
Stock players buy the shares, which probably have a double in them over the next three years.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and increase your bid by 10 cents with a second order.
This is a bet that UPS (UPS) will not fall below $140 by the November 20 option expiration day in 14 trading days.
Here are the specific trades you need to enter this position:
Buy 13 November 2020 (UPS) $130 calls at………….………$31.00
Sell short 13 November 2020 (UPS) $140 calls at………....$22.30
Net Cost:……………............………..…….………..………….….....$8.70
Potential Profit: $10.00 - $8.70 = $1.30
(13 X 100 X $1.30) = $1,690 or 14.94% in 14 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 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.
