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) – STOP LOSS
SELL the Amazon (AMZN) March 2020 $1,700-$1,800 in-the-money vertical BULL CALL spread at $80.00 or best
Closing Trade
3-9-2019
expiration date: March 20, 2020
Portfolio weighting: 10%
Number of Contracts = 1 contract
With a major crash in progress, I am going to stop out of the last of my longs with a small loss.
I am therefore selling the Amazon (AMZN) March 2020 $1,700-$1,800 in-the-money vertical BULL CALL spread at $80.00 or best.
This was a bet that Amazon shares would NOT fall below $1,800 by the March 20 option expiration date in 17 trading days. In other words, it was a bet that (AMZN) won’t fall by more than 186 points in three weeks. With 9 trading days to expiration, we didn’t quite make it.
Our losses here will be more than offset by profits we have made in (CCL), (AAPL), (UAL), and (WYNN), which are all down close to 10% across the board.
Here are the specific trades you need to exit this position:
Sell 1 March 2020 (AMZN) $1,700 calls at…............….………$180.00
Buy to cover short 1 March 2020 (AMZN) $1,800 calls at….$100.00
Net Proceeds:……….…………......................…………..…….….....$80.00
Loss: $88.00 - $80.00 = -$8.00
(1 X 100 X $8.00) = -$800
CHART APP IS DOWN-NO CHART
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.
