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 - (WYNN) - BUY
BUY the Wynn Resorts (WYNN) March 2020 $110-$120 in-the-money vertical BULL CALL spread at $8.60 or best
Opening Trade
2-21-2019
expiration date: March 20, 2020
Portfolio weighting: 10%
Number of Contracts = 12 contracts
If I were looking to contract a fatal virus, there would be no better place to go than the sweaty heaving masses that surround Macao blackjack and craps tables. I know them well.
It just so happens that Wynn Resorts (WYNN) is precisely in that business. As a result, its shares have been one of the worst hit by the Corona pandemic, down by some 25% from its January peak.
Shareholders have to be frustrated because they enjoyed a monster rally following the China trade deal, only to give it all back, thanks to a pesky little virus.
I am going to use today’s Corona-induced 350-point dip in the Dow Average to step back into (WYNN). This is a highly volatile, cyclical, high-risk stock that gyrates from any threat to the global economy or relations with China.
In addition, this particular combination of strike prices gives you huge support at the 200-day moving average at $121.82. Please note that this option spread will be profitable whether the market goes up, sideways, or down small over the next four weeks.
I am therefore buying the Wynn Resorts (WYNN) March 2020 $110-$120 in-the-money vertical BULL CALL spread at $8.60 or best.
Don’t pay more than $9.20 or you’ll be chasing.
If you don’t do options, buy the stock outright for a short term bounce.
This is a bet that Wynn shares will NOT fall below $120.00 by the March 20 option expiration date in 20 trading days.
This is also a bet that we are not already in a recession, which I believe is still at least 12 months off.
Here are the specific trades you need to execute this position:
Buy 12 March 2020 (WYNN) $110 calls at…...….……$21.00
Sell short 12 March 2020 (WYNN) $120 calls at…….$12.40
Net Cost:………………………….………......…...…..….….....$8.60
Potential Profit: $10.00 - $8.60 = $1.40
(12 X 100 X $1.40) = $1,680 or 16.27% 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.
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.
