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) November, 2018 $1,550-$1,600 in-the-money vertical BULL CALL spread at $40.76 or best
Opening Trade
10-18-2018
expiration date: November 16, 2018
Portfolio weighting: 10%
Number of Contracts = 3 contracts
Another day, another meltdown, this time triggered by worsening relations with our oil supply, Saudi Arabia.
Stocks are also down big because the European Community may boot Italy out of their union if it goes through with plans to pursue a big spending, deficit financed budget.
Gee, I wonder where they got that idea?
I am therefore buying the Amazon (AMZN) November, 2018 $1,550-$1,600 in-the-money vertical BULL CALL spread at $40.76 or best.
If the (SPY) 200-day moving average holds, so should amazon’s at $1,654.
Don’t pay more than $45 or you’ll be chasing.
If you don’t do options, close your eyes and buy Amazon shares outright. It’s going to new all-time highs.
Here are the specific trades you need to execute this position:
Buy 3 November 2018 (AMZN) $1,550 calls at…….………$257.00
Sell short 3 November 2018 (AMZN) $1,600 calls at……….$216.24
Net Cost:………………………….…………..…….…....
Potential Profit: $50.00 - $40.76 = $9.24
(3 X 100 X $9.24) = $2,772 or 22.66% in 20 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.