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) June 2022 $155-$165 in-the-money vertical Bear Put at $8.20 or best
Opening Trade
5-12-2022
expiration date: June 17, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
Apple announced today that supply chain problems in China will cost it $4-$8 billion in the current quarter. This isn’t necessarily such a big deal but the market is now hypersensitive to any kind of bad news.
Apple is in free fall so I need to hedge my long June very deep in-the-money call spread.
I am therefore buying the Apple (AAPL) June 2022 $155-$165 in-the-money vertical Bear Put at $8.20 or best
Don’t pay more than $8.80 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 10 cents with a second order.
This is a bet that Apple (AAPL) will not rise above $155 by the June 17 option expiration day in 25 trading days. For more about (AAPL), please click here for their website.
Here are the specific trades you need to execute this position:
Buy 12 June 2022 (AAPL) $165 puts at………….………$24.00
Sell short 12 June 2022 (AAPL) $155 puts at………....$15.80
Net Cost:……………………..…….………..…………......….....$8.20
Potential Profit: $10.00 - $8.20 = $1.80
(12 X 100 X $1.80) = $2,160 or 21.95%.
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.
