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) April 2020 $250-$260 in-the-money vertical Bull Call spread at $9.00 or best
Opening Trade
4-17-2020
expiration date: April 24, 2020
Portfolio weighting: 10%
Number of Contracts = 11 contracts
Special Note: This is a one week vertical bull call spread only
The extremely elevated level of the Volatility Index makes possible trades once considered unthinkable from a risk/reward basis. That includes the weekly options expirations. We had such good luck with our last couple of weeklies that I am going to go again.
I love Apple for the long term, and I don’t believe we are going to break to new lows in the next five trading days. Believe it or not, I think this coming week could be boring, at least compared to the recent action. This position also has the benefit of huge support at the 200-day moving average at $253.59.
I think the days of cataclysmic $1,500-$2,000 point Dow days in the Dow are behind us, so it is safe to start putting on these very short term plays.
A $7 dive this morning gives us a decent long side entry point for Steve Jobs’ creation.
I am therefore buying the Apple (AAPL) April 2020 $250-$260 in-the-money vertical Bull Call spread at $9.00 or best.
Don’t pay more than $9.50 or you will be chasing.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and increase your offer by 20 cents with a second order.
This is a bet that Apple (AAPL) will not trade below $260 by the April 24 option expiration day in only five trading days.
Here are the specific trades you need to exit this position:
Buy 11 April 24, 2020 (AAPL) $250 calls at………….…...……$32.00
Sell short 11 April 24, 2020 (AAPL) $260 calls at…….……...$23.00
Net Cost:……………………..…….………..…………..........…...........$9.00
Potential Profit: $10.00 - $9.00 = $1.00
(11 X 100 X $1.00) = $1,100 or 11.11% in 5 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.
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.
