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 - (AAPL) - BUY
BUY the Apple (AAPL)??June, 2018 $130-$140 in-the-money vertical BULL CALL spread at $8.10 or best
Opening Trade
2-9-2018
expiration date:??June 15, 2018
Portfolio weighting: 10%
Number of Contracts = 12 contracts
I think Apple is getting extremely oversold here and that it is time to bet the ranch, going with a much longer strike price than I usually do.
Apple is making a valiant effort to hold at the 200-day moving average and we should reward it.
I am therefore buying the Apple (AAPL)??June, 2018 $130-$140 in-the-money vertical BULL CALL spread at $8.10 or best. Repeat, this is a??JUNEexpiration spread.
This is a bet that Apple will not trade below $138.10 by the June options expiration??in four months
This is a position I just want to put on my back book and forget about.
Long dated options can be tricky to execute, as most trading volume is concentrated in the near months. This is the kind of trade that hedge funds do all day long.
So put the $8.10 limit in, wait a few minutes, and if it doesn't get done cancel it and reenter a new order ten cents higher. You have to discover where the real market is.
The company has the ability to put up to $270 million into share buybacks this year once it gets past the ???quiet period??? following its earnings release. If they do so, it will boost earnings from $12 to $14 dollars a share.
I believe the real reason that the stock has been weak is that simply too many people own it. It is only being sold so traders can finance margin calls in other illiquid money losing positions.
This position is so far in the money that Apple shares would have to drop far below the 200 day moving average, some 11.46%. This is 23.27% off the recent top.
Don???t pay more than??$8.50??for this position or you???ll be chasing.
If you don???t do options, close your eyes and buy Apple shares outright.
Here are the specific trades you need to execute this position:
Buy??12 June 2018??(AAPL) $130 calls at??????.?????????$30.00
Sell short??12 June 2018??(AAPL) $140 calls at?????????.$21.90
Net Cost:??????????????????????????????.????????????..??????.???....
Potential Profit: $10.00 - $8.10 = $1.90
(12 X 100 X $1.90) = $2,280 or 23.45%??in four months.
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.
You must be logged into your account to view the video.
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.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In today's market, investors need every advantage they can get.
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.
