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.
Mad Technology Letter Trade Alert - (MU) - BUY
BUY the Micron Technology (MU) March, 2018 $34-$37 in-the-money vertical BULL CALL spread at $2.50 or best
Opening Trade
2-7-2018
expiration date: March 16, 2018
Portfolio weighting: 10%
Number of Contracts = 40 contracts
It is often said that that stock market has discounted 11 out of the last five recessions.
This is one of those times that the stock market has discounted a recession that isn't going to happen, not for at least two years anyway.
With my Mad Hedge Market Timing Index at a very rare "Extreme Buy" reading of 18, I have to buy stock here or shoot myself in the head.
I believe the bottom in the stock market is in. We may see continued high volatility. May see a terrifying marginal new low.
But for grizzled veterans it is now time to back up the truck and load up on the high quality technology names.
Microsoft (MSFT) just announced explosive growth of its cloud based services revenues, as did Amazon (AMZN) and Alphabet (GOOGL).
And if you like Microsoft, you absolute have to LOVE Micron Technology, which manufactures the millions of chips from which the cloud is built.
I am therefore buying the Micron Technology (MU) March, 2018 $34-$37 in-the-money vertical BULL CALL spread at $2.50 or best.
I can't believe how rich this trade is.
To lose money on this trade Micron would have to fall below $33.50 by theMarch 16 options expiration day in 31 trading days, a monstrous decline of20.23%.
Given the tailwind technology now has behind it, I believe that is highly unlikely.
Micron doesn't announce Q4 earning until March 22, so we have a free run here through the March 16 options expiration. Consider this free money.
Don't pay more than $2.70 this position or you'll be chasing.
Here are the specific trades you need to execute this position:
Buy 40 March 2018 (MU) $34 calls at...........................................$8.50
Sell short 40 March 2018 (MU) $37 calls at..............................$6.00
Net Cost:.............................................................................................
Potential Profit: $3.00 - $2.50 = $0.50
(40 X 100 X $0.50) = $2,000 or 20.00% in 31 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.
