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) July 2020 $280-$290 in-the-money vertical Bull Call spread at $8.80 or best
Opening Trade
6-15-2020
expiration date: July 17, 2020
Portfolio weighting: 10%
Number of Contracts = 12 contracts
I am going to keep with my buy low, sell high philosophy.
So, I am going to use the four day 2,900-point plunge, or 10.4%, in the Dow Average to reestablish my long in Apple. Say thanks to the still elevated level of the Volatility Index (VIX), now at $36.
I love Apple for the long term, and I don’t believe we are going to break to new lows in the next 23 trading days. We are on the eve of 5G phones, which will become the greatest moneymaker of all time.
This position also has the benefit of huge support at the 200-day moving average at $301.69. I think the days of cataclysmic $1,500-$200 point down days in the Dow are behind us, so it is safe to start putting on these very short term plays.
I am therefore buying the Apple (AAPL) July 2020 $280-$290 in-the-money vertical Bull Call spread at $8.80 or best.
Don’t pay more than $9.30 or you will 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 10 cents with a second order.
This is a bet that Apple (AAPL) will not trade below $290 by the July 17 option expiration day in 23 trading days.
Here are the specific trades you need to execute this position:
Buy 12 July 2020 (AAPL) $280 calls at…………..………$62.00
Sell short 12 July 2020 (AAPL) $290 puts at…………...$53.20
Net Cost:……………………..…….………..……..........….….....$8.80
Potential Profit: $10.00 - $8.80 = $1.20
(12 X 100 X $1.20) = $1,440 or 13.63% in 23 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.
