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 - (V) – BUY
BUY the Visa (V) October 2022 $160-$170 in-the-money vertical Bull Call spread at $8.80 or best
Opening Trade
10-7-2022
expiration date: October 21, 2022
Number of Contracts = 12 contracts
I am going to use this morning’s 500-point selloff on the Nonfarm Payroll Report for September to go all in and add another long position. The Volatility Index (VIX) is also back above $31.
Visa is the world’s largest credit card company. It is highly sensitive to any recovery in the economy, which feeds straight into more fee income.
After two down quarters, Q3 likely came in at a 2.0% growth rate. Visa is also a huge beneficiary of inflation, as it raises prices and fees faster.
To learn more about the company, please visit their website at https://usa.visa.com
I am therefore buying the Visa (V) October 2022 $160-$170 in-the-money vertical Bull Call spread at $8.80 or best.
Don’t pay more than $9.20 or you’ll be chasing on a risk/reward basis.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES. Just enter a limit order and work it.
This is a bet that Visa will not fall below $170 by the October 21 options expiration in 10 days.
Here are the specific trades you need to execute this position:
Buy 12 October 2022 (V) $160 calls at………….………$25.00
Sell short 12 October 2022 (V) $170 calls at……….…$16.20
Net Cost:………………………….................………….….....$8.80
Potential Profit: $10.00 - $8.80 = $1.20
(12 X 100 X $1.20) = $1,440, or 13.64% in 10 days.
If you are uncertain about how to execute an options spread, please watch my training video 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.
