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) June 2019 $1,650-$1,700 in-the-money vertical BULL CALL spread at $45.00 or best
Opening Trade
5-15-2019
expiration date: February 15, 2019
Portfolio weighting: 10%
Number of Contracts = 2 contracts
I believe that Amazon (AMZN) shares are oversold in the extreme, and that there is some nice cherry picking to be had. Not only that, I think the current bout of volatility will end as we go into the G-20 meeting in Osaka on June 28.
I am therefore buying the Amazon (AMZN) June 2019 $1,650-$1,700 in-the-money vertical BULL CALL spread at $45.00 or best.
Don’t pay more than $47.00 or you’ll be chasing.
If you don’t do options, buy the stock outright for an extreme oversold bounce.
This is a bet that Amazon shares will NOT fall below $1,700 by the June 21 option expiration date in 27 trading days.
This is also a bet that we are not already in a recession, which I believe is still at least 6-12 months off.
Here are the specific trades you need to execute this position:
Buy 2 June 2019 (AMZN) $1,650 calls at……....………$230.00
Sell short 2 June 2019 (AMZN) $1,700 calls at……….$185.00
Net Cost:………………………….…………..…….…...............$45.00
Potential Profit: $50.00 - $45.00 = $5.00
(2 X 100 X $5.00) = $1,000 or 11.11% in 27 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 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.
