Trade Alert - (GOOGL) April 16, 2019

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 - (GOOGL) – SELL – TAKE PROFITS

SELL the Alphabet (GOOGL) April 2019 $1,080-$1,120 in-the-money vertical BULL CALL spread at $39.90 or best

Closing Trade

4-16-2019

expiration date: April 18, 2019

Portfolio weighting: 10%

Number of Contracts = 3 contracts

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Alphabet is just short of a new 2019 high, so the bell is ringing to take profits here.

Therefore, I am selling the Alphabet (GOOGL) April 2019 $1,080-$1,120 in-the-money vertical BULL CALL spread at $39.90 or best. With only three more days until the April 18 option expiration the risk/reward of continuing is no longer favorable.

If you can’t get done at $39.90 keep moving your limit down ten cents at a time until you are. Alternatively, you can keep the position for three more days and collect the entire $40.00 on Friday, hoping that another 9/11 type event doesn’t happen before then.

By coming out here you get to earn $1,170 or 10.83% in 12 trading days. Well done, and on to the next trade.

This was a bet that Alphabet (GOOGL) will not trade below $1,120 by the April 18 option expiration in 15 trading days.

If you have the stock keep it. Alphabet is going higher.

Here are the specific trades you need to execute to obtain a $10,000 position:

Sell 3 April 2019 (GOOGL) $1,080 calls at………….………$156.00

Buy to cover short 3 April 2019 (GOOGL) $1,120 calls at….$116.10

Net Proceeds:………………………….………..………….….....$39.90

Profit: $39.90 - $36.00 = $3.90

(3 X 100 X $3.90) = $1,170 or 10.83%

To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.

If you are uncertain on how to execute an options spread, please watch my training video on “How to Execute a Vertical Bull Call Spread” 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.

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