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 - (AMZN) - BUY
BUY the Amazon (AMZN)?July, 2018 $1500-$1550 in-the-money vertical BULL CALL spread at $43.00 or best
Opening Trade
6-4-2018
expiration date: July 20, 2018
Portfolio weighting: 10%
Number of Contracts = 3 contracts
It's looking like the upside breakout in technology is real and sustainable. While the rest of the market is left behind in the dust, many names posted new all-time highs on Friday. Clearly, they are discounting the next round of blockbuster technology earnings in July.
I am therefore buying the Amazon (AMZN)?July, 2018 $1,500-$1,550 in-the-money vertical BULL CALL spread at $7.40 or best.
To lose money on this trade (AMZN) would have to drop below $1,500 by the July 20 options expiration from last week's all-time high.
Don't pay more than?$45.00?for this position or you'll be chasing.
If you don't do options, close your eyes and buy Amazon shares outright.
Here are the specific trades you need to execute this position:
Buy 3 July 2018 (AMZN) $1500 calls at................$162.20
Sell short 3 July 2018 (AMZN) $1550 calls at..........$119.20
Net Cost:...........................................................
Potential Profit: $50.00 - $43.00 = $7.00
(3 X 100 X $7.00) = $2,100 or 16.27% in 33 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.