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) – SELL-STOP LOSS
SELL the Apple (AAPL) September 2020 $100-$105 in-the-money vertical Bull Call spread at $4.30 or best
Closing Trade – NOT FOR NEW SUBSCRIBERS
9-11-2020
expiration date: September 18, 2020
Portfolio weighting: 10%
Number of Contracts = 22 contracts
There is a forced liquidation of the massive long position in Apple owned by Softbank going on today, and I want to get out of the way.
We also have massive profits so far this month to protect.
I am therefore selling the Apple (AAPL) September 2020 $100-$105 in-the-money vertical Bull Call spread at $4.30 or best.
This was a bet that Apple (AAPL) will not trade below $105 by the September 18 option expiration day in 9 trading days. That is still $5.32 away, but I want to avoid a potential larger loss.
Here are the specific trades you need to exit this position:
Sell 22 September 2020 (AAPL) $100 calls at………….…….........…$11.50
Buy to cover short 22 September 2020 (AAPL) $105 calls at.........$7.20
Net Proceeds:……………..………..…….………..………….…...................$4.30
Loss: $4.45 - $4.30 = -$0.15
(22 X 100 X -$0.15) = -$330 or -3.48% in 5 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 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.
