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) – STOP LOSS
Sell the Apple (AAPL) June 2022 $125-$135 in-the-money vertical Bull Call spread at $7.90 or best
Closing Trade
5-19-2022
expiration date: June 17, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
This is the last of my positions from before the major breakdown that started ten days ago, so I knew I was going to take a hit on this. As we careen towards my 2% of capital stop-loss limit, risk control is the order of the day. It’s easier to dig yourself out of a small hole than a big one.
At least, the hit on this will be offset by a gain in my short position much higher up.
I am therefore selling the Apple (AAPL) June 2022 $125-$135 in-the-money vertical Bull Call spread at $7.90 or best.
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.
If you have Apple shares, keep them for the long term, as it is still a company with a great future. They will recover once the current recession fears go away, which should be in months.
This was a bet that Apple (AAPL) would not fall below $135 by the June 17 option expiration day in 28 trading days. For more about (AAPL), please click here for their website.
Here are the specific trades you need to close out this position:
Sell 12 June 2022 (AAPL) $125 calls at…….............…….………$17.00
Buy to cover short 12 June 2022 (AAPL) $135 calls at………....$9.10
Net Proceeds:……………………..…….…….........…..………….….....$7.90
Loss: $8.90 - $7.90 = $1.00
(12 X 100 X $1.00) = $1,200 or 11.23%.
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.
