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 - (PANW) – SELL – STOP LOSS
Sell the Palo Alto Networks, Inc. (PANW) September 2020 $230-$235 BULL CALL spread at $2.91
Closing Trade
9-4-2020
expiration date: September 18, 2020
Portfolio weighting: 10%
Number of Contracts = 22 contracts
Markets are selling off indiscriminately – will go to all cash.
Tech has come too far too fast. I will close the Dropbox position as well.
Sell 22 September 2020 (PANW) $230 calls at……...............…….………$9.78
Buy to cover short 22 September 2020 (PANW) $235 calls at………….$6.87
Net Proceeds:………………………….………..........................………….….....$2.91
Loss: $4.40 – 2.91 = -$1.49
(22 X 100 X -$1.49) = -$3,278 or -32.78%
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an 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.
