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) – SELL
SELL the Apple (AAPL) February 2019 $165-$175 in-the-money vertical BEAR PUT spread at $9.00 or best
Closing Trade-NOT FOR NEW SUBSCRIBERS
1-28-2019
expiration date: February 15, 2019
Portfolio weighting: 10%
Number of Contracts = 11 contracts
I hate holding positions through earnings announcements, and Apple announced after the close tomorrow. And while Apple has warned us that earnings will be bad, there is an asymmetric risk to the upside here.
Besides, I am more than happy to lock in a spectacular 7% profit for January by going 100% into cash.
I am therefore selling the Apple (AAPL) February 2019 $165-$175 in-the-money vertical BULL CALL spread at $9.00 or best.
Buying coming out here you get the break even. Even though Apple shares moved $7 against us during the past three weeks, we can get out at cost, thanks to the time decay. That is why we do options spreads.
This WAS a bet that Apple would not rise above the $165 strike price by the February 15 options expiration date in 28 trading days.
It was also a hedge against our other substantial long positions in technology which we have already taken profits on.
If you own the stock keep it for the long term but sell it for the short term. There is eventually a double in the stock.
Here are the specific trades you need to exit this position:
Sell 11 February 2019 (AAPL) $175 puts at………….………$28.00
Buy to cover short 11 February 2019 (AAPL) $165 puts at….$19.00
Net Proceeds:……………………..…….………..………….….....$9.00
Profit: $9.00 - $9.00 = $0.00
(11 X 100 X $0.00) = $0
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.
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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.
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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.