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
BUY Amazon.com, Inc. (AMZN) June 2021 $3,000-$3,010 in-the-money vertical BULL call spread at $8.65
Opening Trade
5-20-2021
expiration date: June 18, 2021
Portfolio weighting: 10%
Number of Contracts = 12 contracts
This is a short-term bet that Amazon.com, Inc. (AMZN) will stay above $3,010 in the next 29 days.
It’s time to revert to high quality in a tech sector that is not cheap.
We have some cushion of the underlying stock to protect against downside moves.
If the underlying stock drops below $3,010, cut your losses. If you can’t get filled at these strikes, roll them up $10.
Amazon has experienced sturdy, resilient price action relative to the rest of tech and I am betting that Amazon will be a strategic place to hide out as tech consolidates.
The underlying stock has mastered going sideways in a range the past 6 months and this is a bet that any downside selloff won’t break the southern limit of that range.
If you don’t do options, buy the stock. I said my end-of-year target was $3,400 in March and AMZN surged past that in the beginning of May. I do believe the stock will finish the year more than 10% higher than the current price. This ecommerce stock should be the cornerstone of any technology portfolio.
Here are the specific trades you need to execute this position:
Buy 12 June 2021 (AMZN) $3,000 calls at………….………$274.63
Sell short 12 June 2021 (AMZN) $3,010 calls at………….$265.98
Net Cost:……………………..…….………..….....................….....$8.65
Potential Profit: $10 - $8.65 = $1.35
(12 X 100 X $1.35) = $1,620 or 15.60% in 29 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.
