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) – TAKE PROFITS
Sell the Amazon.com, Inc. (AMZN) October 2022 $105-$108 in-the-money vertical BULL CALL spread at $2.90
Closing Trade
10-4-2022
expiration date: October 21, 2022
Portfolio weighting: 10%
Number of Contracts = 43 contract
I correctly forecasted a bear market rally and here we have it as tech explodes to the upside.
Amazon is up over 5% this morning and I am inclined to take profits here as the lion’s share of the possible profits has been harvested.
The tech portfolio is outperforming the greater nasdaq index this year as we go from strength to strength.
This bear market rally won’t sustain itself forever and we will quickly take profits here and recycle the proceeds into an even better trade.
Active traders are being rewarded for their smart and calculative positioning and being oversold meant it took just a little loosening to create a tsunami to the upside.
Remember that major market-moving forces such as high inflation, bad global governance, high interest rates, supply chain issues, and military conflict have had no meaningful solution yet, therefore, I do not see this as anything more than a short-term reprieve.
Here are the specific trades you need to exit this position:
Sell to Close 43 October 2022 (AMZN) $105 calls at………….………$18.40
Buy to Close 43 October 2022 (AMZN) $108 calls at……........…….$15.50
Net Proceeds:……………………..……...........................………..…….....$2.90
Profit: $2.90 - $2.30 = $.60
(43 X 100 X $.60) = $2,580 or 26.10%
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.
