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 - (MSFT) - BUY
BUY the Microsoft (MSFT) November 2018 $90-$95 in-the-money vertical BULL CALL spread at $4.50 or best
Opening Trade
10-11-2018
expiration date: November 16, 2018
Portfolio weighting: 10%
Number of Contracts = 22 contracts
The bull market in stocks is not dead, it is only resting. All we are doing now is working off an extreme overbought condition in the market that has persisted for months.
I believe this time the correction will be smaller than the February 11.4% meltdown because this time, we don’t have the $7 billion short volatility (VIX) industry going bankrupt.
With the Mad Hedge Market Timing Index in single digits at 4, there is nearly a 100% chance that this will be a successful trade.
This is a bet that the Microsoft (MSFT) will not trade below $95 by the November 16 option expiration day in 27 trading days. That is a level 12% down from the current price. That would bring the total correction to 19% from the $116.20 top.
Don't pay more than $4.70
If you don’t do options stand aside. This market is all about minimizing risk and running small positions.
Here are the specific trades you need to execute this position:
Buy 22 November 2018 (MSFT) $90 calls at………….………$17.70
Sell short 22 November 2018 (MSFT) $95 calls at………….$13.20
Net Cost:………………………….………..………….…...
Potential Profit: $5.00 - $4.50 = $0.50
(22 X 100 X $0.50) = $1,100 or 11.11% in 27 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.
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.
