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) – SELL – TAKE PROFITS
SELL TAKE PROFITS Advanced Micro Devices, Inc. (AMD) February 2023 $55-$60 in-the-money vertical BULL CALL spread at $4.90
Closing Trade
1-27-2023
expiration date: February 17, 2023
Portfolio weighting: 10%
Number of Contracts = 23 contracts
This was a short-term mildly bullish trade on chip manufacturer AMD that AMD would stay above $60 in the next 29 days.
AMD is a great company and technically had major support lines at $60.
AMD got swept up with the rest of tech as the 10-year interest rate cratered and investors operate with the mindset of an upcoming Fed pivot.
Sentiment in tech shares was overly negative and positioning was such that beaten-down names lurched to the upside dramatically.
We are taking profits in AMD now.
Here are the specific trades you need to exit this position:
Sell to Close 23 February 2023 (AMD) $55 calls at………….………$21.80
Buy to Close 23 February 2023 (AMD) $60 calls at………........….$16.90
Net Proceeds:……………………..…….………...........................…….....$4.90
Profit: $4.90 - $4.30 = $.60
(23 X 100 X $.60) = $1,380 or 13.95%
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.
