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 - (DIS) – BUY
BUY the Walt Disney Corp (DIS) May 2019 $125-$130 in-the-money vertical BULL CALL spread at $4.55 or best
Opening Trade
4-26-2019
expiration date: May 17, 2019
Portfolio weighting: 10%
Number of Contracts = 22 contracts
Disney is going ballistic here off the back of its summer movie program where it is producing half of all the $100 million plus movies this year. Avengers: End Game is set to break all box office records tonight. Even I am going, dragged kicking and screaming by my two teenaged daughters.
Since (DIS) is one of the most cyclical stocks out there, it is also getting big boost from the shockingly hot Q1 GDP print this morning.
I am therefore buying the Walt Disney Corp (DIS) May 2019 $125-$130 in-the-money vertical BULL CALL spread at $4.55 or best. Even though we are entering seasonals that are terrible, I am willing to take a three-week view on (DIS). Don’t pay more than $4.75 for the spread. If you can’t do option buy the stock for a quick trade.
This was in keeping with my recent strategy of only taking on very deep in-the-money, very short dates positions. This is the only way to work with a long-term topping market which could continue on for months.
This was a bet that Disney shares will not fall below the $125 strike price by the May 17 options expiration date.
Here are the specific trades you need to enter this position:
Buy 22 May 2019 (DIS) $125 calls at………….,,,,………$15.00
Sell to short 22 May 2019 (DIS) $130 calls at………….$10.45
Net cost:……………………..…….………..………,,,,,,,,,.….....$4.55
Potential Profit: $5.00 - $4.55 = $0.45
(22 X 100 X $0.45) = $990 or 9.89% in 15 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.
