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.
Tech Alert - Apple Inc. (AAPL) – STOP LOSS
SELL Apple Inc. (AAPL) October 2021 $136-$141 in-the-money vertical BULL call spread at $3.27
Opening Trade – FOR ALL SUBSCRIBERS
10-1-2021
expiration date: October 15, 2021
Portfolio weighting: 10%
Number of Contracts = 23 contracts
This was a short-term bet that Apple Inc. (AAPL) would stay above $141 by the October 15th expiration.
It was time to revert to high quality in a tech sector that isn’t cheap, but the broader macro malaise in places such as China and government debt ceiling fiasco resulting in higher interest rates has really hit tech hard.
In most cases, traders would buy the dip, but APPL has been slowly descending for a month and it’s time to take a loss on this trade.
The short-term sentiment in the Nasdaq is overwhelmingly bearish.
Here are the specific trades you need to exit this position:
Sell to Close 23 October 2021 (AAPL) $136 calls at………….………$5.80
Buy to Close 23 October 2021 (AAPL) $141 calls at……….........….$2.53
Net Proceeds:…………….......................………..…….………..…….....$3.27
Loss: $4.34 - $3.27 = $1.07
(23 X 100 X $.66) = $2,461 or 24.65%
If you are uncertain on 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.
