Trade Alert - (CSCO) July 9, 2020

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.

Tech Alert - Cisco Systems, Inc. (CSCO) - BUY

BUY Cisco Systems, Inc. (CSCO) August 2020 $38-$41 in-the-money vertical BULL call spread at $2.60

Opening Trade

7-9-2020

expiration date: August 21, 2020

Portfolio weighting: 10%

Number of Contracts = 38 contracts

In a day of broad-based consolidation in the tech market, Cisco was upgraded and I am too jumping on their bandwagon.

This is a trade that Cisco’s underlying shares will stay above $41 in the next 44 days.

The network infrastructure company is undervalued at current prices.

They will be driven by strength in public sector and service provider revenue, and as business spending improves as networking and security needs grow.

If you don’t do options, buy and hold.

Here are the specific trades you need to execute this position:

Buy 38 August 2020 (CSCO) $38 call at………….………$8.70

Sell short 38 August 2020 (CSCO) $41 call at………….$6.10

Net Cost:……………………................…….………..…….....$2.60

Potential Profit: $3 - $2.6 = $0.40

(38 X 100 X $.40) = $1,520 or 15.20% in 44 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 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.

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