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 - Apple Inc. (AAPL) – STOP LOSS
SELL Apple Inc. (AAPL) April 2022 $165 - $170 in-the-money vertical BULL CALL spread at $3.70
Closing Trade
4-8-2022
expiration date: April 14, 2022
Portfolio weighting: 10%
Number of Contracts = 22 contract
This was a 9-trade wagering that Apple (AAPL) would stay above $170.
We went aggressive short-term to reflect that much of the bad news (there’s been a lot lately) has been priced into the stock.
However, the bond market has been gouged with the 10-year US treasury rate up past 2.7% this morning reflecting that there could be an absolute bombshell CPI number next week.
The bond market is telling us to close our long positions and next week could get quite ugly.
The Fed jawboning is one thing, but the bond market doesn’t believe the Fed right now and the carnage might well spill over to next week when we get inflation data therefore strap on your seatbelt for next week as I expect heightened volatility.
Here are the specific trades you need to exit this position:
Sell to Close 22 April 2022 (APPL) $165 calls at………….………$6.45
Buy to Close 22 April 2022 (APPL) $170 calls at………........….$2.75
Net Proceeds:……………………..…….………....................…….....$3.70
Loss: $4.30-$3.70 = $.60
(22 X 100 X $.60) = $1,320 or 13.96%
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.
