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 - Applied Materials, Inc. (AMAT) – BUY
Buy Applied Materials, Inc. (AMAT) April 2023 $105-$110 in-the-money vertical BULL CALL spread at $4.00
Opening Trade
3-21-2023
expiration date: April 21, 2023
Portfolio weighting: 10%
Number of Contracts = 25 contracts
This is a short-term aggressively bullish trade on chip firm Applied Materials, Inc. (AMAT) that AMAT will stay above $110 in the next 31 days.
AMAT is down today and I’m using this dip and the technical support at $120 to buy the dip.
Traders and investors should be buying the dip on any good tech stock for the rest of March.
I strongly doubt that the US Central Bank will do anything to rock the boat coming up and that means all systems go for tech stocks.
The price action has been fierce to the upside with any mini pullback met with thunderous buying.
Ride the hot hand of tech while it lasts because April could deliver us another set of new problems as traders and investors.
Don’t pay more than $4.13.
Here are the specific trades you need to execute this position:
Buy 25 April 2023 (AMAT) $105 calls at………….………$16.90
Sell short 25 April 2023 (AMAT) $110 calls at………….$12.90
Net Cost:……………………..…….………..…................….....$4.00
Potential Profit: $5 - $4.00 = $1.00
(25 X 100 X $1.00) = $2,500 or 25.00% in 31 days
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.