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 - Facebook, Inc. (FB) – BUY
BUY Facebook, Inc. (FB) October 2021 $335-$340 in-the-money vertical BULL CALL spread at $4.40
Opening Trade
9-17-2021
expiration date: October 15, 2021
Portfolio weighting: 10%
Number of Contracts = 23 contracts
This is a trade that Facebook, Inc. (FB) stock will stay above $340 by October 15th expiration which is precisely 28 days from now.
This is a short-term technical bet and I have been waiting for an entry point to get into this one.
Facebook is down today over 2.5% and today is one of the few times that an entry point has been carved out in recent memory.
The fundamentals of this stock are terrific.
Facebook is on course to do more than $100 billion in revenue this year and it was only just in 2018, they did $55 billion.
Enough said.
If the market doesn’t collapse, this should be a profit-taking trade.
I like that we have technical support at $360 and if we experience a melt-up, it will be a profit-taking opportunity.
Ad tech stocks like GOOGL and FB are the most profitable because not only do they have duopolies, but they don’t need to source material to build products in an inflationary environment and they are at the vanguard of the work-from-home movement.
The reopening of the U.S. should enrich GOOGL and FB even more and most importantly in an accelerated fashion.
Short-term, these dips are traders’ dreams and it’s time to strike while the iron is hot.
Here are the specific trades you need to execute this position:
Buy 23 October 2021 (FB) $335 calls at…………..………$31.70
Sell short 23 October 2021 (FB) $340 calls at………….$27.30
Net Cost:………………..............……..…….……..…..…….....$4.40
Potential Profit: $5 - $4.40 = $.60
(23 X 100 X $.60) = $1,380 or 13.64% in 28 days
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.
