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 - (MSFT) – BUY
BUY the Microsoft (MSFT) May 2024 $430-$440 in-the-money vertical Bear Put debit spread at $8.60 or best
Opening Trade
4-25-2024
expiration date: March 17, 2024
Number of Contracts = 12 contracts
As we enter the summer doldrums, I am willing to bet that Microsoft will not go to a new all-time high in three weeks. (MSFT) also has a rare 33% implied volatility for its options. Usually, it is much more boring than that. I believe that (MSFT) is entering trading range along with the rest of the AI world.
I can also use this short position to partially hedge the three long positions already in my trading portfolio.
I am therefore buying Microsoft (MSFT) May 2024 $430-$440 in-the-money vertical Bear Put debit spread at $8.60 or best.
Don’t pay more than $9.20 or you’ll be chasing on a risk/reward basis.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES. Just enter a limit order and work it.
To learn more about the company please visit their website at www.microsoft.com
This is a bet that Microsoft will not rise above $430 by the May 17 option expiration in 16 trading days, a new all-time high.
Microsoft Corporation is a Megacap American multinational corporation and headquartered in Redmond, Washington.[2] Microsoft's best-known products are the Windows line of operating systems, the Microsoft suite of productivity applications that include Word, Excel, and PowerPoint, and the Edge web browser. Its flagship hardware products are the Xbox video game consoles and the Microsoft lineup of touchscreen personal computers. Microsoft ranked No. 14 in the 2022 Fortune 500 rankings of the largest United States corporations by total revenue and it was the world's largest software by revenue in 2023.
Here are the specific trades you need to execute this position:
Buy 12 May 2024 (MSFT) $440 puts at………….……..…$45.00
Sell short 12 May 2024 (MSFT) $430 puts at……………$36.40
Net Cost:………………………….………….….........................$8.60
Potential Profit: $10.00 - $8.60 = $1.40
(12 X 100 X $1.40) = $1,680 or 16.28% in 16 days.
If you are uncertain about how to execute a bear put options spread, please watch my training video 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.
