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 Trade Alert - Dropbox, Inc. (DBX) – SELL – STOP LOSS
SELL Dropbox, Inc. (DBX) September 2020 $16.50-$19.50 in-the-money vertical BULL CALL spread at $2.32
Closing Trade
9-4-2020
expiration date: September 18, 2020
Portfolio weighting: 10%
Number of Contracts = 39 contracts
Tech markets are dropping like a brick in the ocean.
We have now closed all our long positions.
Nasdaq is already down -3.5% after just an hour and the sell-off is becoming unorderly. It is time to take your long positions off the table in conditions like these.
Here are the specific trades you need to exit this position:
Sell 39 September 2020 (DBX) $16.50 calls at…….............…….………$3.11
Buy to cover short 39 September 2020 (DBX) $19.50 calls at………….$.79
Net Proceeds:……………………..….............................….………..…….....$2.32
Loss: $2.56 - $2.32 =- $0.24
(39 X 100 X0.24) = -$936 or -9.36%
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.
