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 Apple (AAPL) August, 2014 $85-$90 in-the-money bull call spread at $4.92 or best
expiration date: August 15, 2014
Portfolio weighting: 10%
Number of Contracts = 25 contracts
We nailed the Apple earnings once again.
Sales in China of the Cupertino company?s multifaceted products continue to shock to the upside. And no one wants to sell a single share of stock going into the iPhone 6 release in September, which may well put in the high for the year.
There is nothing left in the Apple (AAPL) August, 2014 $85-$90 in-the-money bull call spread. We have squeezed out 92 out of 100 cents of the maximum potential profit.
So I am going to take a profit, control my risk, and free up some dry powder. There is no point in carrying a position for three more weeks just to make an additional 20 basis points.
No doubt, Steve Jobs? creation will give us another chance to get in, once again, and make even more money. A new all time high is a great thing to trade against.
Keep in mind that the options market is highly illiquid now, so don?t hold me to these prices. They are ballpark estimates, at best.
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.
If the price of this spread has moved more than 5% by the time you receive this Trade Alert, don?t chase it. Wait for the next one. There are plenty of fish in the sea.
Here are the specific trades you need to execute this position:
Sell 25 August, 2014 (AAPL) $85 calls at?????.?$12.25
Buy to cover short 25 August, 2014 (AAPL) $90 calls at..$7.33
Profit: $4.92 – $4.00 = $0.92
(25 X 100 X $0.92) = $2,300 or 2.30% profit for the notional $100,000 portfolio.