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) – TAKE PROFITS
SELL Amazon.com, Inc. (AMZN) June 2024 $172.50-$177.50 in-the-money vertical BULL CALL spread at $4.70
Closing Trade
6-10-2024
expiration date: June 21, 2024
Portfolio weighting: 10%
Number of Contracts = 25 contracts
This was a near-term bullish trade in AMZN that underlying Amazon shares would stay above $177.50 in a period of 32 days.
This was an aggressive trade that paid off.
There was strong underlying support in the technical analysis dating back to last November 2023 in AMZN shares.
To be honest, the trade started off with poor price action and sank below our upper strike price, but dip buyers came out in full force and now we are taking tidy profits today.
The Nasdaq has been off to races after the US Central Bank echoed its overly dovish stance on monetary policy.
AMZN also benefitted in the short term with AI power Nvidia reporting great earnings which were a boon to all megacap tech stocks.
I liked the setup for AMZN and I was proven correct on this short-term tactical trade. Bet on the fed pivot is still alive and kicking and we are riding this trend to profits,
Here are the specific trades you need to exit this position:
Sell to Close 25 June 2024 (AMZN) $172.50 calls at………….………$14.35
Buy to Close 25 June 2024 (AMZN) $177.50 calls at……................$9.65
Net Proceeds:……………………..…….………..……...............................$4.70
Profit: $4.7 - $4 = $.70
(25 X 100 X $.70) = $1,750 or 17.50%
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 on “How to Execute a Vertical Bull Call Spread” 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.