Trade Alert - (AMZN) October 29, 2018 BUY
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 - (AMZN) - BUY
BUY the Amazon (AMZN) November 2018 $1,350-$1,400 in-the-money vertical BULL CALL spread at $43.00 or best
Opening Trade
10-29-2018
expiration date: November 16, 2018
Portfolio weighting: 20%
Number of Contracts = 5 contracts
I believe that Amazon (AMZN) shares are oversold in the extreme, and that there is some nice cherry picking to be had. Not only that, I think the current bout of volatility will end no later than the Midterm election on November 7 in only six trading days.
I am therefore buying the Amazon (AMZN) November, 2018 $1,350-$1,400 in-the-money vertical BULL CALL spread at $43.00 or best.
Don’t pay more than $46 or you’ll be chasing.
This is a bet that Amazon shares will NOTfall below $1,400 by the November 16 option expiration date in 14 trading days. That would be a decline of a heart stopping 31% from the October high weeks ago, or a loss of $340 billion in market capitalization.
Yes, the world’s second largest company would have to lose a third of its value in a month for you to lose money on this trade, off the back of a great earnings report.
Please note that this is in addition to the Amazon (AMZN) November, 2018 $1,550-$1,600 in-the-money vertical BULL CALL spread that we already have
If you don’t do options, close your eyes and buy Amazon shares outright. It’s going to new all-time highs.
Here are the specific trades you need to execute this position:
Buy 5 November 2018 (AMZN) $1,350 calls at…….………$230.00
Sell short 5 November 2018 (AMZN) $1,400 calls at……….$187.00
Net Cost:………………………….…………..…….….....$43.00
Potential Profit: $50.00 - $43.00 = $7.00
(5 X 100 X $7.00) = $3,500 or 19.04% in 14 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.
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Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
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 close to expiration.
If you don’t get it done, don’t worry there will be more.