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 the Amazon.com, Inc. (AMZN) October 2022 $105-$108 in-the-money vertical BULL CALL spread at $2.30
Opening Trade
9-26-2022
expiration date: October 21, 2022
Portfolio weighting: 10%
Number of Contracts = 43 contracts
The broader Nasdaq index has had a terrible last 1-month shedding around 10% in value.
The interest rate paradigm is consuming and feasting on the nature of growth tech and it’s not looking pretty. Tech isn’t attractive in a high-interest rate environment.
However, there is a chance for a brief bear market rally before our next spike in inflation because the short-term bad news is now priced into tech shares.
Technically, we are massively oversold and could experience a short pop to the upside.
Take profits on any substantial move up. The current trading environment favors nimble short-term traders as tech stocks have a short-term ceiling to them that caves lower by the day.
This is a highly tactical bet and this market is really tailor-made for short-term options traders. For traders who can stomach higher risk, roll up call strikes to $106-$109 or $107-$110.
I expect tech markets to be highly choppy for the next few months and I’ll be looking to sell any rally in tech.
Here are the specific trades you need to execute this position:
Buy to Open 43 October 2022 (AMZN) $105 calls at………….………$13.50
Sell to Open 43 October 2022 (AMZN) $108 calls at….........……….$11.20
Net Cost:……………………..…….…..................................……..…….....$2.30
Profit: $3 - $2.30 = $.70
(43 X 100 X $.70) = $3,010 or 30.43%
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.
