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 - (ROM) – BUY
Buy the ProShares Ultra Technology Fund (ROM) November 2021 $105-$110 vertical bull call spread at $4.00 or best
Opening Trade
11-1-2021
expiration date: November 19, 2021
Portfolio weighting: 10%
Number of Contracts = 25 contracts
If you can’t do options, buy the stock on the next big dip. I expect the (ROM) to make it to $150 by March.
I just analyzed the charts of the 30 largest holdings of the (ROM) and what I saw amazed me. Half had been trashed over the past six months, down 30% or more. Half were at all-time highs, like Microsoft (MSFT) and (GOOGL).
What happens next when we enter the seasonally strongest six months of the year? The stocks that went down start to go up because they are cheap. The stocks that are at highs go higher because they have the winning business models.
Cash is trash.
And here’s the kicker.
Rare for ETFs and other baskets of stocks, it has double the volatility of an individual component instead of the usual half. That presents outsize returns for call spreads, both the front month and the long-dated ones all the way out to May 2022 expirations.
The good thing about this timing is that all the big tech earnings came out last week, so there are no potential downside surprises left. (MSFT) and (GOOGL) were great, while (AAPL) and (AMZN) bombed.
To see (ROM) top holdings, please click here.
I am therefore buying the ProShares Ultra Technology Fund (ROM) November 2021 $105-$110 vertical bull call spread at $4.00 or best
Don’t pay more than $4.40 or you’ll be chasing.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and increase your bid by 5 cents with a second order.
This is a bet that (ROM) will not trade below $110 by the November 19 option expiration day in 14 trading days.
Here are the specific trades you need to execute this position:
Buy 25 November 2021 (ROM) $105 calls at……..….………$12.80
Sell short 25 November 2021 (ROM) $110 calls at………....$8.80
Net Cost:………..…….……...........…..……....…….………….......$4.00
Potential Profit: $5.00 - $4.00 = $1.00
(25 X 100 X $1.00) = $2,500 or 25.00% in 14 trading days.
To see how to enter this trade in your online platform, please look at the order ticket below, 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 a Vertical Bull Call Spread” 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.
