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.
Tech Alert - Apple Inc. (AAPL) – SELL – STOP LOSS
SELL – STOP LOSS Apple Inc. (AAPL) February 2021 $126-$129 in-the-money vertical BULL call spread at $2.46
Closing Trade – NOT FOR NEW SUBSCRIBERS
2-18-2021
expiration date: February 19, 2021
Portfolio weighting: 10%
Number of Contracts = 38 contracts
This was a short-term bet that Apple Inc. (AAPL) would stay above $129 by the February 19th expiration date.
We keep grinding lower and with 2 days left, we will need to stomp out here.
It was just only 2 days ago that the underlying stock was above $133, but another 2 days of trending lower have forced my hand as we opened below our upper strike price of $129.
I still believe this is a great company, but news of economic activity in the South stopping because of weather conditions is not bullish for the overall stock market.
How can Apple lover use their iPhone with no electricity?
Why do I love this company in the long run?
Last quarter's top line grew 21% year over year to a record-breaking level of $111.4 billion, while earnings grew 35% to $1.68 per share. Both were readily better than analyst expectations, proving this outfit is still the biggest company in the world for good reason.
This company has proven to be the quintessential buy the dip tech company.
Buy and hold long term because the stock should hit $170 by the end of this year.
Here are the specific trades you need to exit this position:
Sell to Close 38 February 20201 (AAPL) $126 calls at………….………$3.85
Buy to Close 38 February 2021 (AAPL) $129 calls at…...........……….$1.39
Net Proceeds:……………………..…..........................…...………..…….....$2.46
Loss: $2.62 - $2.46 = $.16
(38 X 100 X $.16) = $608 or 6.10%
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 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.
