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) – TAKE PROFITS - NOT FOR THOSE WHO SUBSCRIBED THIS WEEK
Sell the Apple (AAPL) April 2020 $300-$310 in-the-money vertical Bear Put spread at $8.40 or best
4-15-2020
expiration date: May 15, 2020
Portfolio weighting: 10%
Number of Contracts = 13 contracts
This was not my greatest trade idea. I always expected big tech to lead any recovery. I just didn’t think it would happen so soon.
I am therefore going to use this morning’s 700-point dive in the Dow prompted by Trumps cutoff of WHO funding to get out of this short position for even. It’s not worth carrying this risk for four more weeks.
Getting out here at close to cost is a gift. Thank the president.
I am therefore selling the Apple (AAPL) May 2020 $300-$310 in-the-money vertical Bear Put spread at $8.40 or best.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
This was a bet that Apple (AAPL) would not trade above $300 by the May 15 option expiration day in nine trading days.
Here are the specific trades you need to exit this position:
Sell 13 May 2020 (AAPL) $310 puts at……...........…….………$35.00
Buy to cover short 13 May 2020 (AAPL) $300 puts at……...$26.60
Net Proceeds:………………........……..…….………..………….….....$8.40
Profit: $8.40 - $8.30 = $0.10
(13 X 100 X $0.10) = $130 or 1.2% in 6 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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Things to Keep in Mind
Remember, 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.
