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 - (DHI) – BUY
BUY the DH Horton (DHI) August 2024 $185-$195 vertical Bear Put debit spread at $8.70 or best
Opening Trade
8-7-2024
expiration date: August 16, 2024
Portfolio weighting: 10%
Number of Contracts = 12 contracts
With the Volatility Index still at a very high $23, there is still time to squeeze one more position in with seven trading days to expiration.
This trade is also a hedge against our existing DH Horton (DHI) August 2024 $150-$155 vertical BULL CALL debit spread, which is a bet that the stock won’t drip below $155.
Therefore, I am buying the DH Horton (DHI) August 2024 $185-$195 vertical Bear Put debit spread at $8.70 or best.
Don’t pay more than $9.40 or you will 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 lower your offer by 10 cents with a second order.
The bull case for homebuilders is very simple. They are Catching on Fire, with the prospect of falling interest rates. The US has a structural shortage of 10 million homes with 5 million Millennial buyers. Homebuilders have been underbuilding since the 2008 Great Financial Crisis, seeking to emphasize profits and share buybacks over to development land purchases.
Buy (DHI), (LEN), (PMH), (KBH) on any dips. (DHI) is the largest of these with a market capitalization of $57.3 billion.
For details about DH Horton, please visit their site at https://www.drhorton.com
This is a bet that the (DHI) will not rise above $185.00 by the August 16 option expiration in 9 trading days.
Here are the specific trades you need to execute this position:
Buy 12 August 2024 (DHI) $195 puts at………….………$22.00
Sell short 25 August 2024 (DHI) $185 puts at….………$13.30
Net Cost:……………………………..………….…....................$8.70
Enter the orders as a pair at the same time.
Potential Profit: $10.00 - $8.70 = $1.30
(12 X 100 X $1.30) = $1,560 or 14.94% in 7 trading 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.
