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 2023 $155-$160 in-the-money vertical Bear Put at $4.30 or best
Opening Trade
1-31-2023
expiration date: February 17, 2023
Portfolio weighting: 10%
Number of Contracts = 25 contracts
Apple has just rallied a massive $23, or 18.4%, from the January 9 low, so I am going to initiate a new short position.
The pattern of big tech forms so far has been to announce respectable earnings, but horrific forecasts, taking the stocks down big. Apple announces after the close on Thursday.
I am therefore buying the Apple (AAPL) February 2023 $155-$160 in-the-money vertical Bear Put at $4.30 or best.
Don’t pay more than $4.60 or you’ll be chasing.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and increase your bid by 5 cents with a second order.
I believe that Apple will stage a bigger recovery in the future, but this will be a second half of the year game.
I also think that on Wednesday, Fed governor Jay Powell will take interest rates up only 0.25%, but speak harshly, as he did at Jackson Hole last summer. As 25 basis points is already in the market, this will take stocks down.
This is a bet that Apple (AAPL) will not rise above $155 by the February 17 option expiration day in 13 trading days. For more about (AAPL), please click here for their website.
Here are the specific trades you need to execute this position:
Buy 25 February 2023 (AAPL) $160 puts at………….………$17.00
Sell short 25 February 2023 (AAPL) $155 puts at………....$12.70
Net Cost:……………………..…….............………..………….….....$4.30
Potential Profit: $5.00 - $4.30 = $0.70
(25 X 100 X $0.70) = $1,750 or 16.27%.
If you are uncertain about 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.
