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 - Amazon.com, Inc. (AMZN) – BUY
BUY the Amazon.com, Inc. (AMZN) November 2022 $87-$92 in-the-money vertical BULL CALL spread at $4.20
Opening Trade
10-28-2022
expiration date: November 18, 2022
Portfolio weighting: 10%
Number of Contracts = 24 contracts
This is a bullish call that ecommerce company Amazon’s underlying stock will be above $92 by November 18 expiration.
Amazon (AMZN) posted a terrible earnings report and is down around 10% this morning.
The bad news is in the stock and investors are betting that the Fed will strike a dovish tone at the Fed meeting on Nov 2.
That means the risk-reward here is positive and I am executing a bull call spread in Amazon.
When quite prominent members of the Federal government are reportedly pushing the Central Bank to slow down raising rates, that means one thing and one thing only -- long risk assets short term.
Here are the specific trades you need to execute this position:
Buy to Open 24 November 2022 (AMZN) $87 calls at………….………$14.00
Sell to Open 24 November 2022 (AMZN) $92 call at……............…….$9.80
Net Cost:……………………..…….……….......................................…….....$4.20
Potential Profit: $5 - $4.20 = $.80
(24 X 100 X $.80) = $1,920 or 17.80% in 21 days
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.
