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 $150-$155 in-the-money vertical BULL CALL spread at $4.20 or best
Opening Trade
1-30-2018
expiration date: February 16, 2018
Portfolio weighting: 10%
Number of Contracts = 24 contracts
I think Apple is getting oversold here and that it is time to dip my toe back in the water with strike prices $15 lower than the last Trade Alert.
Q4 earnings are out after the close on Thursday and are expected to be great. It is only the Q1 earnings that analysts are concerned about.
The company has the ability to put up to $100 million into share buybacks this year. If they do so, it will boost earnings from $12 to $14 dollars a share.
I believe the real reason that the stock has been weak is that simply too many people own it.
You wanted a dip to buy into? Here's a dip. I am therefore buying the Apple (AAPL) February, 2018 $150-$155 in-the-money vertical BULL CALL spread at $4.20 or best.
This is so far in the money that Apple shares would have to drop below the 200 day moving average, which isn't absolutely going to happen in the next 12 trading days.
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 24 February 2018 (AAPL) $150 calls at........................................$17.30
Sell short 24 February 2018 (AAPL) $155 calls at.................................$13.10
Net Cost:...............................................................................................$4.20
Potential Profit: $5.00 - $4.20 = $0.80
(24 X 100 X $0.80) = $1.920 or 25.00% in 12 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.
