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 - Alphabet Inc. (GOOGL) – SELL TAKE PROFITS
SELL – TAKE PROFITS Alphabet Inc. (GOOGL) June 2021 $2,240-$2,250 in-the-money vertical BULL call spread at $9.95
Closing Trade – NOT FOR NEW SUBSCRIBERS
6-10-2021
expiration date: June 18, 2021
Portfolio weighting: 10%
Number of Contracts = 11 contracts
This was a short-term bet that Alphabet (GOOGL) will stay above $2,250 by June 18th expiration and this one caused us almost no problems with highly positive price action and huge lunges to the upside including today.
We have squeezed most of the profits out of this one and we are taking profits on the position, leaving just 5 cents on the table to get it done.
Well done and on to the next trade.
Money seems to be rotating into tech, and especially big tech because they are the ones most able to stomach any perceived short-term interest rate rise and whose business models aren’t reliant on low-interest rates.
Just take buybacks, companies like APPL, GOOGL, MSFT can pull this off easily because of strong balance sheets while start-ups like Lordstown Motors Corp (RIDE) have announced they don’t even have the capital to produce and deliver 1 model of a car.
GOOGL has to be the best FANG stock right now and it is firing on all cylinders.
The company generated strong top and bottom-line growth, even after adjusting for unrealized investment gains.
GOOGL has $135 billion in cash on its balance sheet and appears to finally be buying back shares.
It has a myriad of businesses that are working perfectly from Google search, Google maps, to YouTube and hardware.
GOOGL's recent earnings report showed elevated growth. Revenue grew 34% to $55.3 billion. That included 48.7% growth at YouTube and 45.7% growth at Google Cloud.
The reason you cannot buy the dip on GOOGL is because it hardly dips at all.
If you don’t do options, you should be holding the stock and never sell it.
Here are the specific trades you need to exit this position:
Sell to Close 11 June 2021 (GOOGL) $2,240 calls at………….………$188.90
Buy to Close 11 June 2021 (GOOGL) $2,250 calls at……...…......….$178.95
Net Proceeds:……………………......................…….………..........…….....$9.95
Profit: $9.95 - $8.73 = $1.22
(11 X 100 X $1.22) = $1,342 or 13.97%
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.
