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 - (BAC) - BUY
BUY the Bank of America (BAC) December, 2017 $25-$26.50 in-the-money vertical BULL CALL spread at $1.36 or best
Opening Trade
12-1-2017
expiration date: December 15, 2017
Portfolio weighting: 10%
Number of Contracts = 74 contracts
The markets are going crazy on the news of the arrest of former National Security Advisor Michael Flynn, and the prospect that he will testify to the president's direct contacts with the Russians during the election.
At one point, the Dow Average was down $350 points, and bonds (TLT) soared three full points, demolishing bank shares.
I am using the dump to buy the Bank of America (BAC) December, 2017 $25-$26.50 in-the-money vertical BULL CALL spread at $1.36 or best.
Take this Trade Alert is an early Christmas gift. It is a rare chance to get into what will be one of the top performing sectors of 2018 at a decent price.
The options market has gone wild just now, and prices are all over the map. The $1.36 price is really a best guess at where you might get something done.
With my Market Timing Index at 59, and risk assets enormously extended, I am not inclined to bet the ranch here.
To lose money on this position (BAC) would have to fall below $26.50 by the December 15 options expiration in ten trading days.
Don't pay more than $1.40 for this position or you'll be chasing.
If you don't do options, this would be a great level to scale into a long in the shares outright.
I will follow up with a special research report on (BAC) next week.
Here are the specific trades you need to execute this position:
Buy 74 December, 2017 (BAC) $25 calls at....................................$2.14
Sell short 74 December, 2017 (BAC) $26.50 calls at....................$0.78
Net Cost:................................................................................
Potential Profit: $1.50 - $1.36 = $0.14
(74 X 100 X $0.14) = $1,036, or 10.29% in 10 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.
You must be logged into your account to view the video.
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.
