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 - Advanced Micro Devices, Inc. (AMD) – BUY
Buy Advanced Micro Devices, Inc. (AMD) February 2023 $55-$60 in-the-money vertical BULL CALL spread at $4.30
Opening Trade
1-19-2023
expiration date: February 17, 2023
Portfolio weighting: 10%
Number of Contracts = 23 contracts
This is a short-term mildly bullish trade on chip manufacturer AMD that AMD will stay above $60 in the next 29 days.
Interest rate hikes are all priced into the equation and the price action is extremely encouraging today as a late-day melt-up ensues.
AMD is a great company and technically has major support lines at $60.
The risk-reward is favorable and it’ll be difficult for the Fed to stop an equity rally with its mere jawboning.
Look at the 10-year interest rate at 3.39% which is trading at discount to the Fed Funds rate.
Last year was a terrible year for AMD and I can easily see the stock finishing the year a lot higher.
Here are the specific trades you need to execute this position:
Buy 23 February 2023 (AMD) $55 calls at……….….………$14.20
Sell short 23 February 2023 (AMD) $60 calls at…….…….$9.90
Net Cost:…………………..................…..…….………..…..….....$4.30
Potential Profit: $5 - $4.30 = $.70
(23 X 100 X $.70) = $1,610 or 16.28% in 29 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.
