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 - (BLK) – BUY
Buy the Blackrock (BLK) February 2021 $640-$660 vertical bull call spread at $17.00 or best
Opening Trade
2-1-2021
expiration date: February 19, 2021
Portfolio weighting: 10%
Number of Contracts = 6 contracts
If you can’t do options, buy the stock on the next big dip. I expect Blackrock (BLK) to double in the coming years.
I want to use up my last 10% of cash to introduce you to a new name. Blackrock is the world’s largest fund manager, with an astounding $8.64 trillion in assets under management.
Originally a bond fund manager, it is now involved in every corner of the financial markets, even bitcoin. I have watched it grow from a niche firm to the dominant player since 1988.
Blackrock is one of the big three managers in addition to Vanguard and State Street. CEO Larry Fink is one of the smartest people in the business.
And here is the play. If stocks are going to rise for the next decade, so will Blackrock’s fee income. And as it gathers more assets in a rising market, there is a leveraged effect on earnings.
In addition, with a 28% implied volatility in the options market compared to 22% for the S&P 500, this is a very attractive spread to add with only a 13-trading day view to the February 19 options expiration.
I am therefore buying the Blackrock (BLK) February 2021 $640-$660 vertical bull call spread at $17.00 or best
Don’t pay more than $18.50 or you’ll be chasing.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and increase your bid by 20 cents with a second order.
This is a bet that Blackrock (BLK)will not trade below $660 by the February 19 option expiration day in 13 trading days.
Here are the specific trades you need to execute this position:
Buy 6 February 2021 (BLK) $640 calls at…………..………$74.00
Sell short 6 February 2021 (BLK) $660 calls at….……....$57.00
Net Cost:………..…….………......................………...….….....$17.00
Potential Profit: $20.00 - $17.00 = $3.00
(6 X 100 X $3.00) = $1,800 or 17.64% in 13 trading days.
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.
