Trade Alert - (AAPL) October 30, 2013
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)
Buy the Apple (AAPL) November $480-$510 bull call spread at $26.50 or best
Opening Trade
10-30-2013
expiration date: 11-18-2013
Portfolio weighting: 10%
Number of Contracts = 4 contracts.
This is an aggressive trade. But Apple refuses to sell off in the wake of the Fed?s decision not to taper or raise interest rates. If the stock can?t go down in the worst of circumstances, therefore it can only go up. The kicker here is that the charts are showing major support bang on $510, our upper strike, where the old resistance provides support.
Everyone is trying to get into these shares in the run-up to the Christmas selling season, which always generates the company?s biggest quarter. And it only has to work for 12 more trading days until expiration. That will enable me to buy a nice big Thanksgiving turkey!
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.
Keep in mind that these are ballpark prices only. Spread pricing can be very volatile on expiration months further out.
Here are the specific trades you need to execute this position:
Buy 4 November, 2013 (AAPL) $480 calls at????.$45.50
Sell short 4 November, 2013 (AAPL) $510 calls at??$19.00
Net Cost:????????????....??..?.?......$26.50
Potential Profit: $30.00 - $26.50 = $3.50
($3.50 X 100 X 4) = $1,400 ? 1.40% for the notional $100,000 model portfolio.
