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 - (AMZN) TAKE PROFITS
SELL the Amazon (AMZN) March, 2018 $1200-$1250 in-the-money vertical BULL CALL spread at $49.40 or best
Closing Trade
2-22-2018
expiration date: March 16, 2018
Portfolio weighting: 10%
Number of Contracts = 3 contracts
I'll take the home run here, the $234.11 run up in Amazon's share price in only 12 trading days to a new all-time high.
At this point we have 91.86% of the maximum potential profit in the trade. The risk/reward of carrying on 16 more days until the March 16 expiration day is no longer favorable.
I am therefore selling my position in the Amazon (AMZN) March, 2018 $1200-$1250 in-the-money vertical BULL CALL spread at $49.40 or best
Better to free up cash here and roll into higher Amazon strikes on the next dump, which seems to now be a regular event. If you have the shares outright keep them. Apple is on its way to $200 this year.
Closing this position brings us an impressive 19.03% profit in only 12 trading days. See what bravery in the face of fire will bring you?
If you bought Amazon shares outright keep them. They are going to $2,000 this year. My friend Jeff Bezos's work is not done.
Here are the specific trades you need to exit this position:
Sell??3 March 2018 (AMZN) $1200 calls at......................................$298.00
Buy to cover short??3 March 2018 (AMZN) $1250 calls at.......................$248.60
Net Proceeds:.....................................................................................$49.40
Profit: $49.40 - $41.50 = $7.90
(3 X 100 X $7.90) = $2,370 or 19.03% in 12 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.
