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 - (AMZN) – BUY
BUY the Amazon (AMZN) February 2022 $3,400-$3,500 in-the-money vertical Bear Put spread at $85.00 or best
Opening Trade
2-4-2022
expiration date: February 18, 2022
Portfolio weighting: 10%
Number of Contracts = 1 contract
I love Amazon for the long term.
Short term, Apple is superheated, in the wake of blowout earnings, exploding ad revenues and a 17% price hike for Amazon Prime. So what is the next good news shocker?
There are none.
That makes me more than happy to sell short a one-day 12% move up in Amazon today. I am even more than eager to execute this trade in the wake of soaring interest rates that are destroying the rest of the technology sector.
I am therefore buying the Amazon (AMZN) February 2022 $3,400-$3,500 in-the-money vertical Bear Put spread at $85.00 or best
Don’t pay more than $93.00 or you’ll be chasing on a risk/reward basis.
This is a bet that Amazon will not rise above $3,400 by the February 18 options expiration in ten trading days.
Here are the specific trades you need to execute this position:
Buy 1 February 2022 (AMZN) $3,500 puts at………….………$394.00
Sell short 1 February 2022 (AMZN) $3,400 puts at…………$309.00
Net Cost:………………………….........………..……........….….….....$85.00
Potential Profit: $100.00 - $85.00 = $15.00
(1 X 100 X $15.00) = $1,500 or 17.64% in 10 trading days.
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.
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.
