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.
Tech Trade Alert - (INTC) TAKE PROFITS
SELL the Intel (INTC) April, 2018 $42-$45 in-the-money vertical BULL CALL spread at $2.98 or best
Closing Trade
4-18-2018
expiration date: April 20, 2018
Portfolio weighting: 10%
Number of Contracts = 38 contracts
Intel (INTC) share are going ballistic this morning so I think it's safe to call this trade a "WIN".
My analysis that the UBS report claiming the entire chip sector was peaking now was totally bogus proved correct. The report took the entire chip sector down 10%-20%.
My bold call is that the chip sector is making a generational change from cyclical to secular growth, as the future demand for chips is so enormous.
Soon, your toaster will be smarter than you, thanks to AI, and that is going to need a lot of chips, billions of them.
So, I am therefore selling the Intel (INTC) April, 2018 $42-$45 in-the-money vertical BULL CALL spread at $2.98 or best. If you can't get my price just wait two more days until the expiration date and you will get the full $3.00.
This is a bet that Intel will not trade below $45 by the April 20 option expiration in 32 trading days. By coming out here you are capturing 95% of the maximum potential profit.
This means you will earn $1,444, or 14.61% in 30 trading days.
Well done and on to the next trade.
If you own the shares keep them for the long term. I think the stock could potentially reach $100 in this cycle. I'll be looking to get back into Intel on the next substantial dip, which can occur at any time.
Here are the specific trades you need to exit this position:
Sell 38 April, 2018 (INTC) $42 calls at........................$12.40
Buy to cover short 38 April, 2018 (INTC) $45 calls at.................$9.42
Net Proceeds:...................................................................................$2.98
Profit: $2.98 - $2.60 = $0.38
(38 X 100 X $0.38) = $1,444 or 14.61% in 30 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.