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) February 2019 $90-$95 in-the-money vertical BULL CALL spread at $4.00 or best
Opening Trade
1-2-2019
expiration date: February 15, 2019
Portfolio weighting: 10%
Number of Contracts = 25 contracts
The bull market in stocks is not dead, it is only resting. All we are doing now is working off an extreme overbought condition in the market that has persisted for years.
This is a bet that the Microsoft (MSFT) will not trade below $90 by the February 15 option expiration in 29 trading days.
If you don’t do options, buy the stock outright.
(MSFT) easily has a double in it over the next three years. It is rapidly gaining market share in the burgeoning Internet cloud at the expense of leader Amazon (AMZN). (MSFT) has also successfully converted its business model from a one-time only software sale to an immensely profitable annual subscription service.
Its CEO Satya Nadella is a genius and is responsible for the turnaround of Microsoft over the last four years. We have already earned a double in the share price off the back of his Herculean efforts.
I have another six stocks like this that I will be issuing trade alerts for the next time the market gives us a substantial dip.
Don’t pay more than $4.70 or you’ll be chasing.
Here are the specific trades you need to execute to obtain a $10,000 position.
Buy 25 January 2019 (MSFT) $85 calls at………….………$17.00
Sell short 25 January 2019 (MSFT) $90 calls at………….$13.00
Net Cost:………………………….………..………….….....$4.00
Potential Profit: $5.00 - $4.00 = $1.00
(25 X 100 X $1.00) = $2,500 or 25% in 29 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.
