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 - (AAPL) - BUY
BUY the Apple (AAPL) April, 2018 $155-$165 in-the-money vertical BULL CALL spread at $8.30 or best
Opening Trade
3-1-2018
expiration date: April 20, 2018
Portfolio weighting: 10%
Number of Contracts = 12 contracts
I think Apple is getting extremely oversold here and that it is time to bet the ranch, going with a much longer strike price than I usually do.
I am therefor buying the Apple (AAPL) April, 2018 $155-$165 in-the-money vertical BULL CALL spread at $8.30 or best
This is a position I just want to put on my back book and forget about.
Long dated options can be tricky to execute, as most trading volume is concentrated in the near months. This is the kind of trade that hedge funds do all day long.
So put the $8.30 limit in, wait a few minutes, and if it doesn't get filled, reenter a new order ten cents higher. You have to discover where the real market is.
The company has the ability to put up to $270 billion into share buybacks this year once it gets past the "quiet period" following its earnings release. If they do so, it will boost earnings from $12 to $14 dollars a share.
I believe the real reason that the stock has been weak is that simply too many people own it. It is only being sold so traders can finance margin calls in other illiquid money losing positions.
Don't pay more than $8.70 for this position or you'll be chasing.
Here are the specific trades you need to execute this position:
Buy 12 April 2018 (AAPL) $155 calls at..........................................$21.30
Sell short 12 April 2018 (AAPL) $165 calls at.....................$13.00
Net Cost:.....................................................................................
Potential Profit: $10.00 - $8.30 = $1.70
(12 X 100 X $1.70) = $2,040 or 20.48% in 35 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.
