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 2022 $180-$190 in-the-money vertical Bear Put spread at $8.60 or best
Opening Trade
1-20-2022
expiration date: February 18, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
I love Apple for the long term.
Short term, Apple is superheated, possibly for as long as six months. Rising interest rates which will persist for the first half of 2022 are definitely not a favorable backdrop for technology stocks of every stripe. And I certainly do not believe that (AAPL) is headed for a new all-time high in the next month.
The fact is that Apple is considered the safest, and therefore is the most over-owned stock in the market and is therefore ripe for a 20% pullback.
I am therefore buying the Apple (AAPL) February 2022 $180-$190 in-the-money vertical Bear Put spread at $8.60 or best.
Don’t pay more than $9.20 or you’ll be chasing on a risk/reward basis.
This is a bet that Apple will not rise above $180 by the February 18 options expiration.
Here are the specific trades you need to execute this position:
Buy 12 February 2022 (AAPL) $190 puts at….…….………$26.00
Sell short 12 February 2022 (AAPL) $180 puts at…………$17.40
Net Cost:………………….............……….………..………….….....$8.60
Potential Profit: $10.00 - $8.60 = $1.40
(12 X 100 X $1.40) = $1,680 or 16.27% in 21 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 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.
