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) March 2019 $180-$185 in-the-money vertical BEAR PUT spread at $4.60 or best
Opening Trade
3-1-2019
expiration date: March 15, 2019
Portfolio weighting: 10%
Number of Contracts = 22 contracts
I believe Apple shares are going to remain in the dog house for the foreseeable future.
That means we have a clear two-week window where the stock will probably go nowhere. The media will remain fixated on ever new negative data point coming out of Asia. The FANGs, in general, have gone to sleep while the action has moved on to domestic plays, such as commodities and energy.
In any case, with my Mad Hedge Market Timing Index at a lofty 72, I am leaning towards the short side.
I am therefore buying the Apple (AAPL) March 2019 $180-$185 in-the-money vertical BEAR PUT spread at $4.60 or best.
Don’t pay more than $4.75 or the risk/reward will tip against you.
This is a bet that Apple will not rise above the $180 strike price by the March 15 options expiration date in 10 trading days.
If you don’t do options sell short the stock outright for a quick trade.
Here are the specific trades you need to execute this position:
Buy 22 March 2019 (AAPL) $185 puts at………….………$11.85
Sell short 22 March 2019 (AAPL) $180 puts at………….$7.25
Net Cost:……………………..…….………..………….….....$4.60
Potential Profit: $5.00 - $4.60 = $0.40
(22 X 100 X $0.40) = $880 or 8.70% in 10 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.
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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.