As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price.
Further Update to: Trade Alert -(AAPL)
Buy the Apple (AAPL) December $460-$490 bull call spread at $25.85 or best
Opening Trade
11-8-2013
expiration date: 12-20-2013
Portfolio weighting: 10%
Number of Contracts = 4 contracts
I am going to use the $24 drop from last weeks top to go back into Apple (AAPL), this time with a December 20 expiration. We tried and failed several times to break through the $510 support level in yesterdays melt down, and that is prompting me to lean bullish. There is great value here for a company that is earning $20 million in net profits per business hour!
In any case, Apple is not the sort of high beta momentum stock that the hedge funds have been dumping with reckless abandon, like Tesla (TSLA) or Herbalife (HLF). But to build in an extra safety margin I lowered my upper strike by $20 down to $490. You never know when the market is going to get stupid.
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.
Keep in mind that these are ballpark prices only. Spread pricing can be very volatile on expiration months further out.
Here are the specific trades you need to execute this position:
Buy 4 December, 2013 (AAPL) $460 calls at????.$59.60
Sell short 4 December, 2013 (AAPL) $490 calls a?$33.75
Net Cost:????????????....??..?.?......$25.85
Profit: $30.00 - $25.85 = $4.15
($4.15 X 100 X 4) = $1,660 ? 1.20% for the notional $100,000 model portfolio.
Here are the specific trades you need to execute this position:
Buy 4 December, 2013 (AAPL) $460 calls at????.$59.60
Sell short 4 December, 2013 (AAPL) $490 calls a?$33.75
Net Cost:????????????....??..?.?......$25.85
Profit: $30.00 - $25.85 = $4.15
($4.15 X 100 X 4) = $1,660 ? 1.20% for the notional $100,000 model portfolio.
