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 - Lam Research Corporation (LRCX) – BUY
Buy Lam Research Corporation (LRCX) September 2024 $720-$730 in-the-money vertical BULL CALL spread at $8.00
Opening Trade
8-13-2024
expiration date: September 20, 2024
Portfolio weighting: 10%
Number of Contracts = 12 contracts
In the short term, there is a high likelihood that we are “all systems go” for chip stocks as the biggest black swan, the Yen carry trade, has failed to blow up the equity rally.
The surge in demand for AI-powered chips has increased the need for wafer fabrication equipment, sophisticated and expensive tools essential for chip manufacturing, benefiting companies like Lam Research.
I am jumping in aggressively into LRCX after avoiding the carnage of July.
After price action has shown us that we have formed a short-term bottom, I would also be inclined to execute aggressive positions in Micron (MU) or AMD.
Don’t pay more than $8.20.
Here are the specific trades you need to execute this position:
Buy to Open 12 September 2024 (LRCX) $720 calls at………….……$110.20
Sell to short 12 September 2024 (LRCX) $730 calls at………….......$102.20
Net Cost:……………………..…….………..……..........................................$8.00
Potential Profit: $10 - $8 = $2
(12 X 100 X $2) = $2,400 or 25.00% in 38 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.
