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 - (MSFT) – BUY
BUY the Microsoft (MSFT) September 2022 $235-$245 in-the-money vertical Bull Call spread at $8.90 or best
Opening Trade
8-30-2022
expiration date: September 16, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
If you don’t do options, buy the stock. My target for (MSFT) over the next year is $350, up 34%.
We just hit my first support level for the S&P 500 (SPY) at $395, or half the gains from the June-August rally.
I am therefore adding a small position in the best quality stock that is deep in-the-money with only 13 trading days until the September 16 option expiration.
With the Volatility Index (VIX) reaching $28 today, it’s time to start dipping your toe in the water with risk again. Today, you can add call spreads that are so far in the money that it is almost impossible to lose money.
I love Microsoft for the long term. This is yet another opportunity to buy Cadillacs at Volkswagen prices.
You would need a crash of Biblical proportions, on the scale of the 1987 crash, which the current state of the economy doesn’t justify.
I am therefore buying the Microsoft (MSFT) September 2022 $235-$245 in-the-money vertical Bull Call spread at $8.90 or best.
Don’t pay more than $9.30 or you’ll be chasing on a risk/reward basis.
This is a bet that Microsoft will not fall below $245 by the September 16 options expiration.
Here are the specific trades you need to execute this position:
Buy 12 September 2022 (MSFT) $235 calls at………….………$29.00
Sell short 12 September 2022 (MSFT) $245 calls at…….……$20.10
Net Cost:………………………….……..................…..………….….....$8.90
Potential Profit: $10.00 - $8.90 = $1.10
(12 X 100 X $1.10) = $1,320 or 12.35% in 13 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.
