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) - BUY
BUY Apple Inc. (AAPL) February 2021 $126-$129 in-the-money vertical BULL call spread at $2.62
Opening Trade
2-5-2021
expiration date: February 19, 2021
Portfolio weighting: 10%
Number of Contracts = 38 contracts
This is a short-term bet that Apple Inc. (AAPL) will stay above $129 in the next 15 days.
It’s time to revert to high quality in a tech sector that is not cheap.
We have around 5% of cushion of the underlying stock to protect against downside moves.
I believe adding Apple with 15 days to go to expiration is a favorable trade and playing it from the $129 support level is the way to go.
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.
If you don’t do options, buy and hold long term because the stock should hit $170 this year.
Here are the specific trades you need to execute this position:
Buy 38 February 2021 (AAPL) $126 calls at………….………$10.55
Sell short 38 February 2021 (AAPL) $129 calls at……....…….$7.93
Net Cost:……………………..…….........................………..…….....$2.62
Potential Profit: $3 - $2.62 = $.38
(38 X 100 X $.38) = $1,444 or 14.50% in 15 days
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.
