Taking Profits On Our SPY Call Spread

You have just made a respectable 10.40% profit in only two trading days. What’s more, you have captured 90.32% of the maximum potential profit in this position. So it’s time to take a welcome profit. The risk/reward of running this position into the May 20 expiration is no longer favorable. As I argued vociferously at the February 11 bottom, yield support is underpinning stocks in a huge way, frustrating the hell out of short sellers, market timers, and hedge funds everywhere. With the volatility Index (VIX) plunging to the $13 handle today we have a nice opportunity to sell the S&P 500 SPDR’s (NYSEARCA: SPY ) May , 2016 $195-$198 in-the-money vertical bull call spread for a few extra pennies than we could yesterday. This all lends further credibility to my “Dreaded Flat Line of Death Scenario” whereby markets move sideways in a narrow range and nobody makes any money, except us. To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of optionshouse . 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. Here are the specific trades you need to execute this position: Sell 37 May, 2016 $195 calls at………….….……$12.40 Buy to cover short 37 May, 2016 $198 calls at…..$9.43 Net Cost:…………………………………………………..$2.97 Profit: $2.97 – $2.69 = $0.28 (37 X 100 X $0.28) = $1,036 or 10.40% profit in 2 trading days. Is That a Profit I See? Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Apple Is No Longer The Biggest Stock: Why You Should Worry This Time

Loading the player… Apple ( AAPL ) has again lost its crown as the most valuable company, as it plunges to its lowest level in nearly two years. Google owner Alphabet ( GOOGL ) is dropping in the stock market today as well, but it is now the biggest company. The switch comes shortly after Apple posted its first-ever decline in iPhone sales, and as analysts continued to voice concerns over a longer upgrade cycle. The last time Alphabet was able to overtake Apple was a little over two months ago, though it only lasted a few days. But as Apple’s stock becomes more and more technically damaged, it’ll be interesting to see if it can last this time. Apple shares are crumbling 2.6% in huge volume, dropping below the 90 price level intraday to a fresh 23-month low. The stock is now 32% below its all-time high, reached in April 2015. IBD’s Take: How healthy is Apple’s stock and how does it stand up vs. rivals? Find out at IBD Stock Checkup Alphabet is sliding 0.4% in slightly above-average volume. Shares were able to retake the 200-day line last week and are now looking for support near that level. The stock is 10% below its early-February high and 7% below a cup-with-handle buy point of 777.41 that it failed to break out of after issuing disappointing earnings results. Amazon Worth $3 Trillion? And don’t forget to keep an eye on the other big “A” tech stock: Amazon ( AMZN ). The e-commerce giant has a market cap of about $338 billion, compared with Apple’s $493 billion valuation and Alphabet’s nearly $500 billion market cap, but its stock is performing very well. Amazon hit another new all-time high in intraday trade Thursday, with the stock up fractionally at midday. Amazon is extended about 18% past a cup-with-handle buy point it initially cleared shortly before the company’s latest quarterly report. Venture capital firm Social Capital recently gave Amazon a $3 trillion, 10-year valuation. Analysts say Amazon is set to overtake Macy’s ( M ) as the No. 1 U.S. apparel retailer next year. It may also be poised to grab bigger positions in the consumables and food and beverage markets in the next few years. Meanwhile, Facebook ( FB ) has a $342 billion market cap. The social networking giant is very near its recent all-time high as it continues to trade within buy range from a cup-with-handle base that it broke out of on its earnings results. Facebook shares were essentially flat in early afternoon trade.

Disney’s Exit From Toys-To-Life Video Games Could Boost Activision

Walt Disney ‘s ( DIS ) decision to end its Infinity interactive toy and video game product line could provide a lift to rivals in the toys-to-life business, namely Activision Blizzard ( ATVI ) and Warner Bros. Interactive Entertainment, a unit of Time Warner ( TWX ). Disney announced Tuesday that it is getting out of the self-published video game business and canceling its Infinity game series. Disney took a $147 million charge to its fiscal-second-quarter results to close the division. Disney’s Infinity exit leaves Activision’s Skylanders, Warner’s Lego Dimensions and Nintendo ‘s ( NTDOY ) Amiibo in the toys-to-life games segment. The toys-to-life genre involves the use of figurines or action figures that are placed on a small platform to interact with on-screen play for game consoles. “Disney’s announcement that they are exiting the toys-to-life category in a production capacity creates some interesting opportunities,” Cowen analyst Doug Creutz said in a report Thursday. “First, we think it paves the way for a significant bounce back in Skylanders sales this year; second, we suspect the Disney IP (intellectual property) will eventually wind up as part of WB’s Lego Dimensions franchise.” Toys-to-life video game sales, excluding sales of stand-alone toys, peaked in 2013 with the launch of Infinity, Creutz said. The category declined 20% in 2014 and was flat in 2015, he said. Nintendo launched Amiibo toys in 2014, but it doesn’t have a stand-alone game like Infinity, Skylanders and Lego Dimensions. Amiibo toys are integrated into existing Nintendo games. “With Activision now the only player planning to launch a toys-to-life game in 2016 (there will be some Dimensions playsets but no new game), if the category remains flat, Skylanders could grow by as much as 300%,” Creutz said. “This would be a source of surprise upside to Activision’s guidance. “In any case, the elimination of a competitor can only be a positive for both Activision and WB’s profitability from the category.” Cowen rates Activision stock outperform, with a price target of 44. Activision stock was up a fraction, above 37, in afternoon trading on the stock market today . The shares broke out of a cup-with-handle base at a 34.76 buy point on April 13. Cowen rates Disney and Time Warner stocks as market perform. Disney stock was down a fraction Thursday afternoon, while Time Warner was down more than 1%. RELATED: EA Stock Soars Like ‘Star Wars’ Millennium Falcon After Q4 Beat .