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 - (ROKU) - BUY
BUY the Roku (ROKU) November 2018 $40-$45 in-the-money vertical BULL CALL spread at $4.20 or best
Opening Trade
10-18-2018
expiration date: November 16, 2018
Portfolio weighting: 10%
Number of Contracts =24 contracts
Entry points like this are rare, so I am adding an aggressive three positions to the Mad Hedge Technology Letter model portfolio today.
I am therefor buying the Roku (ROKU) November 2018 $40-$45 in-the-money vertical BULL CALL spread at $4.20 or best
This is a bet that the Roku (ROKU) will not trade below $45 by the November 16 option expiration day in 20 trading days. That is a level 41.93% down from the all-time high forged at the beginning of October.
Don’t pay more than $4.50 for this position or you’ll be chasing.
If you don’t do options buy the stock outright. This is a great entry point for the best set top box streaming play in the entire market.
Here are the specific trades you need to execute this position:
Buy 24 November 2018 (ROKU) $40 calls at………….…$18.40
Sell short 24 November 2018 (ROKU) $45 calls at……….$14.20
Net Cost:………………………….………..………….…...
Potential Profit: $5.00 - $4.20 = $0.80
(24 X 100 X $0.80) = $1,920 or 19.04% 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.
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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 it done, don’t worry. There are another 250 Trade Alerts coming at you over the coming 12 months.
