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) – TAKE PROFITS
SELL the Amazon (AMZN) November, 2018 $1,350-$1,400 in-the-money vertical BULL CALL spread at $49.20 or best
Closing Trade-NOT FOR NEW SUBSCRIBERS
11-6-2018
expiration date: November 16, 2018
Portfolio weighting: 20%
Number of Contracts = 5 contracts
This has been the home run of home runs, capturing 88.5% of the maximum potential profit in on six trading days with a double position. The risk/reward of carry this position is not longer favorable, ESPECIALLY, through today’s midterm election.
I am therefore selling the Amazon (AMZN) November, 2018 $1,350-$1,400 in-the-money vertical BULL CALL spread at $49.20 or best.
This was a bet that Amazon (AMZN) shares would NOT fall below $1,400 by the November 16 option expiration date in 14 trading days. That would be a decline of a heart stopping 31% from the October high weeks ago, or a loss of $340 billion in market capitalization.
Here we are at $1,641.01 with only eight trading days left. This is the benefit of having the guts to load up on leveraged position when everyone else is puking their guts out.
Here are the specific trades you need to exit this position:
Sell 5 November 2018 (AMZN) $1,350 calls at…….……………$294.00
Buy to cover short 5 November 2018 (AMZN) $1,400 calls at…$244.80
Net Proceeds:………………………….…………..………..….....$49.20
Potential Profit: $49.20 - $43.00 = $6.20
(5 X 100 X $6.20) = $3,100 or 14.41% in 6 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.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In today's market, investors need every advantage they can get.
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.
