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) May 2024 $185-$195 in-the-money vertical Bear Put debit spread at $8.60 or best
Closing Trade
5-7-2024
expiration date: May 17, 2024
Number of Contracts = 12 contracts
Apple’s earnings came in awful as I expected. But the announcement of a massive $110 share buyback peed on the parade for this trade. I don’t like hanging around this close to a strike price with 8 days until the May 17 option expiration. The risk/reward is no good.
I am therefore selling Apple (AAPL) May 2024 $185-$195 in-the-money vertical Bear Put debit spread at $8.60 or best.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES. Just enter a limit order in the middle market between the bid and offer and work it.
This was a bet that Apple would not rise above $185 by the May 17 option expiration in 8 trading days.
Here are the specific trades you need to exit this position:
Sell 12 May 2024 (AAPL) $195 puts at………….…................……$11.00
Buy to Cover short 12 May 2024 (AAPL) $185 puts at……………$2.40
Net proceeds:………………………….………….….............................$8.60
Loss: $9.00 - $8.60 = -$0.40
(12 X 100 X $0.40) = $480 or 4.65% in 7 trading days.
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.
