As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price.
Trade Alert ? (AAPL)
Sell the (AAPL) December, 2012 $620-$650 Call Spread at $20.05 or best
expiration date: 12-21-2012
Portfolio weighting: 30%
($30,000/100/$20.05) = 13 Contracts
Apple appears to have lost its upside momentum, so I am going to use this morning?s modest strength to bail out. I should read my own research someday. Looks like the iPhone 5 launch did mark a short term peak, as did other similar launches in the past.
I still love the company, but I am going to come out here for a small loss and look to reestablish lower on the next spike down. It?s the best thing to do with a big position like this. Fortunately, gold is bailing us out on our overall performance today.
Keep in mind that these are only ball park prices, as the spreads can be highly volatile. Here are the specific trades you need to execute this profitable position:
Sell 13 X (AAPL) December, 2012 $620 Calls at??…..????. $69.75
Cover short 13 X (AAPL) December, 2012 $650 calls at???.-$49.70
Net Proceeds???????????????????……………………?. $20.05
Loss = $22.20 – $20.05 = $2.15
(-$2.15 X 100 X 13) = -$2,795, or -2.80% for the notional $100,000 model portfolio.