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 2022 $165-$175 in-the-money vertical Bear Put at $9.70 or best
Opening Trade
9-28-2022
expiration date: October 21, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
There is news out this morning that Apple is canceling its Indian iPhone production plans, taking the stock down $7.00. It's probably not true, but I’ll take the win anyway.
In any case, the market in general is screaming for a short-term, rip-your-face-off rally. Since we added this position, Apple shares have fallen by $12.00. The risk/reward of continuing for 17 more trading days is no longer favorable. We also have the Mad Hedge Market Timing Index at a four-month low at 18, well into “BUY” territory.
I am therefore selling the Apple (AAPL) October 2022 $165-$175 in-the-money vertical Bear Put at $9.70 or best.
As a result, you get to take home $1,080, or 10.22% in 8 trading days. Well done and on to the next trade.
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 lower your offer by 10 cents with a second order.
This was a bet that Apple (AAPL) would 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 exit this position:
Sell 12 October 2022 (AAPL) $175 puts at……….....….………$28.00
Buy to cover short 12 October 2022 (AAPL) $165 puts at...$18.30
Net Proceeds:……………………..…….………..….......……….….....$9.70
Profit: $9.70 - $8.80 = $0.90
(12 X 100 X $0.90) = $1,080 or 10.22% in 8 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.
