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) – TAKE PROFITS
SELL the Apple (AAPL) October 2019 $205-$210 in-the-money vertical BULL CALL spread at $4.93
Closing Trade
10-11-2019
expiration date: October 18, 2019
Portfolio weighting: 10%
Number of Contracts = 24 contracts
With Apple shares up 11% from our nearest strike price with only five trading days to run, we have pretty much squeezed all the juice out of this lemon. By coming out here, we can earn 91.76% of the maximum potential profit in a highly risky market.
I am therefore selling the Apple (AAPL) October 2019 $205-$210 in-the-money vertical BULL CALL spread at $4.93 or best. By coming out here you get to earn a handsome profit of $1,872 or 18.79% in 7 trading days.
This was a bet that Apple (AAPL) would not trade below $210 by the October 18 option expiration day in 12 trading days.
Well done and on to the next trade.
Here are the specific trades you need to execute this position:
SELL 24 October 2019 (AAPL) $205 calls at………$11.00
BUY to cover 2019 (AAPL) $210 calls at............….$6.07
Proceeds:……………………..…….………..…………........$4.93
Profit: $4.93 - $4.15 = $0.78
(24 X 100 X $0.78) = $1,872 or 18.79% in 7 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.
