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) October 2022 $165-$175 in-the-money vertical Bear Put spread at $8.80 or best
Opening Trade
9-19-2022
expiration date: October 21, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
Apple has been a great long-term investment for me. My split-adjusted cost is now less than the quarterly dividend, about 25 cents.
However, there ARE times not to own Apple, and this is one of those times. Whenever they launch a new multigenerational model, the shares tend to correct about 40%. Since the iPhone 14 was launched early this month, the shares have already fallen by $29, or 16.48%. A typical Apple drawdown is 40%.
Since the disastrous CPI report last week, it looks like markets may have to correct for another month or two before we see a turnaround. So, adding a short-term short position seems prudent here.
I am therefore buying the Apple (AAPL) October 2022 $165-$175 in-the-money vertical Bear Put spread at $8.80 or best.
Don’t pay more than $9.30 or you’ll be chasing.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and increase your bid by 10 cents with a second order.
This is a bet that Apple (AAPL) will not rise above $165 by the October 21 options expiration day in 24 trading days. For more about (AAPL), please click here for their website at https://www.apple.com
Here are the specific trades you need to execute this position:
Buy 12 October 2022 (AAPL) $175 puts at………….………$23.00
Sell short 12 October 2022 (AAPL) $165 puts at………....$14.20
Net Cost:……………………..…….………..………..........….….....$8.80
Potential Profit: $10.00 - $8.80 = $1.20
(12 X 100 X $1.20) = $1,440 or 13.64% in 24 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.
