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
SELL the Apple (AAPL) January 2023 $145-$155 in-the-money vertical BEAR PUT spread at $9.96 or best
Closing Trade – NOT FOR NEW SUBSCRIBERS!
1-3-2023
Expiration date: January 20, 2023
Portfolio weighting: 10%
Number of Contracts = 12 contracts
The next six months are going to see the greatest trading market of all time. That means playing ranges, taking quick profits, and running away with the money as fast as you can.
Since we added this position, Apple shares have absolutely cratered. We also caught a good chunk of time decay over the holidays. With 96% of the maximum potential profit in hand, the risk/reward of continuing for 13 more trading days until the January 20 option expiration is no longer favorable.
I am therefore selling the Apple (AAPL) January 2023 $145-$155 in-the-money vertical BEAR PUT spread at $9.96 or best.
As a result, you get to take home $1,152 or 10.67% in 5 trading days.
Well done, and on to the next trade! We are starting 2023 with a BANG!
I believe the final shoe to fall in this tech wreck will be the breakdown of Apple shares, the most widely owned stock in the world. A drop to $125 was a chip shot, and as low as $100 a possibility.
I think the stock market is ready for a real shellacking this month. A 5% drop is likely, and if we get lucky, maybe 10%. The Volatility Index (VIX) should climb to at least $30. Some Cassandras are calling for a rise to $45.
And let me tell you, starting out the New Year with a big profit in your trading account is the way to go. It lets you trade from a position of strength for the rest of the year.
I didn’t see any upside surprises on the horizon that could have upset this position. Q4 earnings are about to be released and the sense of foreboding too palpable.
We also got an assist from the rapidly descending 200-day moving average at $150.90, which should provide major upside resistance.
I am not sure how many trading windows we are going to get in 2023, so we have to take advantage of everyone, even if it is from a ski slope.
This was a bet that Apple will not rise above the $145 strike price by the January 20 options expiration date in 18 trading days.
Here are the specific trades you need to close out this position:
Sell 12 January 2023 (AAPL) $155 puts at………….........………$30.00
But to cover short 12 January 2023 (AAPL) $145 puts at…….$20.04
Net Proceeds:……………………..…….………..………...........….….....$9.96
Profit: $9.96 - $9.00 = $0.96
(12 X 100 X $0.96) = $1,152 or 10.67% in 5 trading days.
If you are uncertain about how to execute an options spread, please watch my training video by clicking here.
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.
