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) – SELL – STOP LOSS
SELL STOP LOSS Facebook, Inc. (FB) October 2021 $335-$340 in-the-money vertical BULL CALL spread at $3.10
Closing Trade
9-28-2021
expiration date: October 15, 2021
Portfolio weighting: 10%
Number of Contracts = 23 contracts
This was a trade that Facebook, Inc. (FB) stock would stay above $340 by October 15th expiration.
The Nasdaq has experienced a massive sell-off this morning which has nothing to do with FB itself.
Higher interest rates and a looming government shutdown were the triggers for a risk-off move in tech.
The sell-off is picking up pace in FB down 4% and it’s time to stop out here.
Why do we like Facebook?
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.
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.
Here are the specific trades you need to execute this position:
Sell to Close 23 October 2021 (FB) $335 calls at………….………$12.10
Buy to Close 23 October 2021 (FB) $340 calls at….........……….$9.00
Net Proceeds:…………………….....................…….……..…..…….....$3.10
Loss: $4.40 - $3.10 = $1.10
(23 X 100 X $1.10) = $2,530 or 25%
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.
