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) April 2019 $1600-$1650 in-the-money vertical BULL CALL spread at $44.50 or up to $47.00
Opening Trade
3-25-2019
expiration date: April 18, 2019
Portfolio weighting: 10%
Number of Contracts = 2 contracts
I think the new Fed ultra-dovishness will drive investors into the big tech stocks one more time.
What happens when QE comes back? You buy the QE beneficiaries of old.
Therefore, I am buying the Amazon (AMZN) April 2019 $1600-$1650 in-the-money vertical BULL CALL spread at $44.50 or best. This is a bet that (AMZN) will not trade below $1,650 by the April 18 options expiration in 14 trading days.
Don’t pay more than $47.00 or the risk-reward will turn against you.
If you don’t do options, buy the stock outright for a trade. (AMZN) easily has a double in it over the next three years.
Here are the specific trades you need to execute this position:
Buy 2 April 2019 (AMZN) $1,600 calls at………….………$186.00
Sell short 2 April 2019 (AMZN) $1,650 calls at………….$141.50
Net Cost:……………………..........…….………..………….….....$44.50
Potential Profit: $50.00 - $44.50 = $5.50
(2 X 100 X $5.50) = $1,100 or 13.63% in 15 trading days
To see how to enter this trade in your online platform, please look at the order ticket above, 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 Vertical Call and Put Debit Spreads by clicking here.
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Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
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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 close to expiration.
If you don't get done, don't worry. There are another 250 Trade Alerts coming at you over the coming 12 months.
