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) September, 2017 $170-$175 in-the-money vertical BEAR PUT spread at $4.50 or best
Opening Trade
8-11-2017
expiration date: September 15, 2017
Portfolio weighting: 10%
Number of Contracts = 22 contracts
Yes, I know you think I am completely MAD selling short Apple shares here.
However, I think we are in for at least one more round of rough sailing in the equity markets this month, and the that FANG stocks will lead to the downside.
I am therefore buying the Apple (AAPL) September, 2017 $170-$175 in-the-money vertical BEAR PUT spread at $4.50 or best.
This is a bet that Apple shares will NOT rise above $170 by the September 15 option expiration in 24 trading days, compared to the current $157.66.
To lose money on this trade Apple would have to rocket to a new all time high quickly, which it isn't going to do during these uncertain, volatile times.
Don't pay more than 4.65 for this position or you'll be chasing.
It goes without saying that this is not a riskless trade.
Apple will release its next generation IPhone 8 sometime in late September or October, and sales are expected to break all records.
However, this is not exactly a state secret, and I believe that this was largely discounted by the $30 move from $135 to $165 that started in March.
I think that the $13 cushion we have in this trade against the lower $170 strike will be ample protection for the next four weeks.
After all, we could be only one tweet away from a home run on this trade.
If you don't do options, stand aside. Longer term, I think Apple will continue to appreciate, possibly to $200 by some time in 2018.
This is a short term trade only.
We just have to give the market a chance to have a few more heart attacks before the current correction ends.
To see how to enter this trade in your online platform, please look at the order ticket below, 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 a Vertical Bear Put Spread by clicking here at
http://members.
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 on expiration months farther out.
Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.
Here are the specific trades you need to execute this position:
Buy 22 September, 2017 (AAPL) $175 puts at................................................$17.70
Sell Short 22 September, 2017 (AAPL) $170 puts 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 24 trading days.
