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) – STOP LOSS
SELL the Apple (AAPL) March 2022 $150-$155 in-the-money vertical Bull Call spread at $3.40 or best
Closing Trade
2-24-2022
expiration date: March 18, 2022
Portfolio weighting: 10%
Number of Contracts = 24 contracts
This is clearly not the correct position, nor the right strike prices to have during a full-on Russian invasion, which I had not expected. It’s the wrong sector with the wrong strikes at the wrong time. Markets need time to reorient themselves to the new reality.
I still have enormous profits to protect. Uncertainty in the markets is exploding.
I am therefore selling the Apple (AAPL) March 2022 $150-$155 in-the-money vertical Bull Call spread at $3.40 or best
This was a bet that Apple would not fall below $155 by the March 18 options expiration.
Here are the specific trades you need to close out this position:
Sell 24 March 2022 (AAPL) $150 calls at………...........….………$10.00
Buy to cover short 24 March 2022 (AAPL) $155 calls at…………$6.60
Net Proceeds:……………….............………….………..………….….....$3.40
Loss: $4.10 - $3.40 = -$0.70
(24 X 100 X -$0.70) = $1,680, or 17.07%.
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 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.
