Trade Alert - (AAPL) January 24, 2022

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) February 2022 $135-$140 in-the-money vertical Bull Call spread at $4.20 or best

Opening Trade

1-24-2022

expiration date: February 18, 2022

Portfolio weighting: 10%

Number of Contracts = 24 contracts

I love Apple for the long term.

With the Dow Average down $1,000 and the Volatility Index (VIX) just short of a one-year high, it’s time to ring the cash register again with new underpriced longs.

The S&P 500 is now down an astonishing 12.5% from the high made 12 trading days ago. It has already hit my worst-case scenario downside target presented at my Wednesday, January 19 global strategy webinar.

Time to buy!

I am therefore buying the Apple (AAPL) February 2022 $135-$140 in-the-money vertical Bull Call spread at $4.20 or best.

Don’t pay more than $4.50 or you’ll be chasing on a risk/reward basis.

This is a bet that Apple will not fall below $140 by the February 18 option expiration. Even if Russia invades the Ukraine, the public is not going to stop buying iPhones.

The advantage of these strike prices is that you get huge support from the 50-week moving average at $143.88.

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

Buy 24 February 2022 (AAPL) $135 calls at………….………$26.00

Sell short 24 February 2022 (AAPL) $140 calls at….………$21.80

Net Cost:………………………...............….………..………….….....$4.20

Potential Profit: $5.00 - $4.20 = $0.80

(24 X 100 X $0.80) = $1,920 or 16.27% in 19 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 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.

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.