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 – Amazon.com, Inc. (AMZN)
Buy Amazon.com, Inc. (AMZN) January 2023 $98-$103 in-the-money vertical BEAR PUT spread at $4.45
Opening Trade
1-11-2023
expiration date: January 20, 2023
Portfolio weighting: 10%
Number of Contracts = 22 contracts
I am executing a 9-day trade that underlying shares of AMZN will stay below $98.
Whispers of revenue downgrades are piling up in the tech world and at some point the chickens will come home to roost.
AMZN is overbought here and this is a 9-day way to play it.
The CPI report comes out tomorrow and there are expectations of lower inflation which is more or less priced in.
This is the most expected recession in the history of US economics.
If there is anything fishy about the CPI report, the market will sell the rumor with a thud after the news hits.
For the next 4-6 months, AMZN will be a buy-the-dip candidate in the tech world.
Here are the specific trades you need to execute this position:
Buy 22 January 2023 (AMZN) $103 puts at………….………$10.40
Sell short 22 January 2023 (AMZN) $98 puts at…...……….$5.95
Net Cost:……………………..…….………..……...........................$4.45
Potential Profit: $5- $4.45 = $.55
(22 X 100 X $.55) = $1,210 or 12.36% in 9 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.
