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) February, 2018 $165-$170 in-the-money vertical BULL CALL spread at $4.00 or best
Opening Trade
1-17-2017
expiration date: February 16, 2018
Portfolio weighting: 10%
Number of Contracts = 25 contracts
Apple is breaking out to the upside.
It is doing this on the news that it will take a massive $38 billion tax hit on the mountain of money it is about to repatriate back to the US from aboard.
It turns out that my own prediction of a $33 billion tax hit last week was overly conservative. The fact that the shares are rallying to new highs on the news, instead of diving, makes the shares a huge "BUY" right now. It is well on its way to my 2018 target of $200 a share.
This is a bet that Apple shares will NOT fall below $165 by the February 16 option expiration in 22 trading days, compared to the current $178.48.
To lose money on this trade Apple would have to crash in the current environment, which isn't going to happen. It is now considered one of the preeminent "safe" stocks in the market today.
Don't pay more than $4.50 for this position or you'll be chasing.
If you don't do options, close your eyes and buy Apple shares outright.
Here are the specific trades you need to execute this position:
Buy 25 February 2018 (AAPL) $165 calls at..........................$15.40
Sell short 25 February 2018 (AAPL) $170 calls at.....................$11.40
Net Cost:.....................................................................................$4.00
Potential Profit: $5.00 - $4.00 = $1.00
(25X 100 X $1.00) = $2,500 or 25.00% in 22 trading days.
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 on How to Execute Vertical Call and Put Debit Spreads by clicking here.
You must be logged into your account to view the video.
Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In today's market, investors need every advantage they can get.
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 close to expiration.
If you don't get done, don't worry. There are another 250 Trade Alerts coming at you over the coming 12 months.
