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 Trade Alert - (AMZN) - TAKE PROFITS
SELL the Amazon (AMZN) July, 2018 $1500-$1550 in-the-money vertical BULL CALL spread at $49.00 or best
Closing Trade
6-27-2018
expiration date: July 20, 2018
Portfolio weighting: 10%
Number of Contracts = 3 contracts
Note to self: next time buy the Amazon calls only, not the more conservative call spread. I would have made five times more money.
We have pretty much squeezed this trade for all its worth, capturing 98.57% of the maximum potential profit. Continuing until the July 20 option expiration date to get the last ten cents would be madness. Remember, pigs get fed, hogs get slaughtered.
I am therefore selling the Amazon (AMZN) July, 2018 $1,500-$1,550 in-the-money vertical BULL CALL spread at $49.00 or best.
By coming out here you are earning a 13.95%, or $1,800 profit in 20 trading days, earning $2,040. That is not bad in these miserable trading conditions, when the Dow Average is still down 1% this year.
If you bought the stock keep it. My target for Amazon is still $2,000 by the end of the year.
Here are the specific trades you need to execute this position:
Sell 3 July 2018 (AMZN) $1500 calls at.....................$210.00
Buy to cover short 3 July 2018 (AMZN) $1550 calls at....$160.00
Net Proceeds:............................................................$49.00
Profit: $49.00 - $43.00 = $6.00
(3 X 100 X $6.00) = $1,800 or 13.95% in 20 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.
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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.
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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.