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) December 2018 $185-$190 in-the-money vertical BULL CALL spread at $4.00 or best
Opening Trade
11-9-2018
expiration date: December 21, 2018
Portfolio weighting: 10%
Number of Contracts = 25 contracts
I believe that Apple (AAPL) has become the “safe” stock in the market. And now you have a chance to buy it with strike prices that were last seen during the end July melt up.
I am therefore buying the Apple (AAPL) December 2018 $185-$190 in-the-money vertical BULL CALL spread at $4.00 or best.
This particular set of strikes have the benefit that they are well below the 200-day moving average, which should provide major support if the market continues to melt down, which it won’t.
Apple just announced record profits and we are now going into the Christmas peaking selling season, normally the most profitable time of the year. In any case, we see Steve Jobs’ creation evolving into a software company like everyone else, with the continued roll out of new services.
This is a bet that the Apple (AAPL) will not trade below $190 by the December 21 option expiration day in 34 trading days. That would bring the total correction to 19% from the $235 top if we get that far.
Don’t pay more than $4.50 for this position or you’ll be chasing.
If you don’t do options buy the stock outright.
Here are the specific trades you need to execute this position:
Buy 25 December 2018 (AAPL) $185 calls at………….………$21.00
Sell short 25 December 2018 (AAPL) $190 calls at………….$17.00
Net Cost:……………………..…….………..………….….....$4.00
Potential Profit: $5.00 - $4.00 = $1.00
(25 X 100 X $1.00) = $2,500 or 25.00% in 34 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.
