okay great so I want to quickly discuss with you a new trade alert this alert
was sent out to my subscribers yesterday and it's been a very profitable trade so
far however I want to communicate it to you because this is the type of alert
that is constantly sent out to my subscribers and it provides actionable
advice for them if they believe that it's in their best interest to follow my
trades so on Wednesday I identified this opportunity and before we get started I
just want to let you guys know that I am NOT a registered investment advisor and
options and trading in general do carry risks so everything that I say should
not be taken as investment advice and you have to do your own due diligence so
again I am NOT a registered investment advisor nothing that I tell you can be
taken as investment advice or should be taken as investment advice you should
evaluate everything that I say through your own lens and whether it's good for
you and do your own diligence so anyway the trade alert that I believe is a good
opportunity in which I mean in my own account is in Raytheon RTN so on Tuesday
Raytheon was trading up to a $187.50 and
then on Wednesday it declined in value all the way it declined in value by
around $8 dollars or so I think it fell below around a $175
at one point what we did in my trade alerts even though we were not
as patient as we should have been is we sold a $160 strike price
put so that's the trade that I recommended at that price. I believe
it was the strike price was higher than that I believe that we sold a few
specific expirations in the beginning, when Raytheon was only down around three
dollars we sold one $167.5 put and then I believe
later on once it it felt even more we placed another trade but in this
specific situation if you have interest in following my
recommendations then right now I would recommend making the following trade by
you know what I believe is a good opportunity is by trading the May 10
you would sell the $162.5 strike put and by doing so
you can collect around 85 cents in premium now if you also want to take
advantage of the high implied volatility that's inherent in Raytheon right now
you can go all the way out to the August monthly expiration and you can choose a
strike price that's as low as a $150. Again right now
Raytheon is trading at $178.50 on
Tuesday it was trading at $187.50 so
as a result its training around nine dollars below where it was just a few
days ago you can go all the way out to August you can sell the monthly you can
choose the one hundred and fifty strike put and in exchange for selling that and
taking on that risk and agreeing to buy Raytheon and one hundred and fifty
dollars you will collect around a dollar fifty in premium or one hundred and
fifty dollars per contract that means that if you choose the August expiration
with the strike price of one hundred and fifty you would agree to buy Raytheon in
the worst-case scenario at $148.50
now a lot of people are overly concerned about assignment in the real world your
chances of getting assigned are extremely low I probably get assigned
around two or three times every single year and when I do get assigned it's by
choice because you can always roll and you can manage the position and that's
something that I discussed in my options training education course at BestStockStrategy.com/memberships
but to recap I want to discuss this specific
trade which I sent out to my alerts members and if you have interest in
signing up for the alerts it's only $19 for 7 days you can
go to BestStockStrategy.com/memberships and they frequently receive
these type of alerts because they follow my trades and this specific trade to
recap is Raytheon which right now is trading around one hundred and seventy
eight dollars and fifty cents on Tuesday always trading at one hundred and eighty
seven dollars and fifty cents it fell around eight dollars from where it
closed on Tuesday and it fell $8 on Wednesday I won't at one point I believe
it was trading below 175 dollars it is rebounded slightly on Wednesday we got
in very early and then we sold the 167.5 and then we also sold
a lower price strike and right now on Friday the trade that I believe would be
in your best and will rather betray that I believe would that I am interested in
making is to identify and trade the May 10 $162.5 put
strike and that will give you around eighty five cents of premium or $85 per
contract or if you want to go all the way out to August you can just you can
sell the $150 strike and collect around a dollar fifty in
premium if you want to turn this position into a spread for the May tenth
$162.5 put you can sell the one sixty two and a
half you can collect around eighty five cents and then you can buy let's say the
one fifty-five strike as you guys know I'm not very I'm not a proponent of
selling strikes a rather of selling spreads I believe that naked options are
much safer but I do understand that there is a higher return on capital and
a greater capital efficiency when you trade spreads if you decide to turn that
August monthly hundred and fifty strike put into a spread you can sell the 150
you can collect on a dollar fifty in premium and then you can also buy the
140 strike put which would then reduce your maximum loss from a hundred and
fifty dollars or fifteen thousand dollars per contract if raytheon which
is a fifty billion dollar company goes bankrupt which is extremely unlikely and
it's not an expected outcome but if you wanted to turn it into a spread you can
sell the 150 you come by the 140 which as a result would give you a maximum
loss per contract of ten dollars a share or one thousand dollars I would estimate
that the probability of profit on these trades are extremely high probably
around 95% or so I'm just estimating that but figuring that last year
I'm traded up to around 230 dollars and then in December it fell all the way
down to around 140 in the worst case scenario if I if Raytheon Falls I would
be able to roll and manage this position and given enough time I could definitely
turn this position profitable do I think that this position is even going to be
challenged I don't believe it's going to be challenged and in my opinion I think
that this represents a rounding a trade so if you have interest in receiving
these type of alerts you can go to best stock strategies calm slash memberships
there you can follow my trades and also receive my thoughts and remember I am
NOT a registered investment advisor nothing that I say on this video should
be construed as investment advice options trading does carry risks so
please do your own due diligence and if you have any questions let me know
feel free to go to BestStockStrategy.com enter in your email address and receive over 400
dollars of free training that is incredibly valuable and that's more
valuable than other people's paid materials once again this is David Jaffee
and I appreciate your attention