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 - Broadcom Inc. (AVGO) – BUY
Buy Broadcom Inc. (AVGO) October 2024 $158-$162 in-the-money vertical BULL CALL spread at $3.30
Opening Trade
9-25-2024
expiration date: October 18, 2024
Portfolio weighting: 10%
Number of Contracts = 30 contracts
I am bullish chips going into the October 18th expiration. The weakness in chips recently won’t last for long and I believe Broadcom (AVGO) will outperform in the next 23 days. This is a mildly bullish trade that the underlying stock of AVGO will stay above $162 until expiration. The Santa Claus rally has been pulled forward and this is it, folks!
I executed one bull call spread in Nvidia already and am looking to deploy my gunpowder in other strong names. I wouldn’t be too passive here in tech stocks.
Don’t pay more than $3.45.
Here are the specific trades you need to execute this position:
Buy to Open 30 October 2024 (AVGO) $158 calls at…………$20.00
Sell to short 30 October 2024 (AVGO) $162 calls at……….…$16.70
Net Cost:……………………..…….………..……..............................$3.30
Potential Profit: $4 - $3.3 = $.70
(30 X 100 X $.70) = $2,100 or 21.21% in 23 days
If you are uncertain about 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.