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 – DocuSign, Inc. (DOCU) - BUY
Buy DocuSign, Inc. (DOCU) February 2023 $65-$70 in-the-money vertical BEAR PUT spread at $4.25
Opening Trade
1-30-2022
expiration date: February 17, 2023
Portfolio weighting: 10%
Number of Contracts = 23 contracts
I am executing a trade that underlying shares of DOCU will stay below $65 in the next 18 days.
Whispers of revenue downgrades are piling up in tech world and at some point, the chickens will come home to roost.
Docusign was a lockdown darling and I don’t believe it will be able to muster the safe magic going forward.
The Nasdaq appears to be rolling over in the short-term as we head into the Fed meeting.
Powell could strike a hawkish tone to tamper down the 9% rally in the Nasdaq.
Here are the specific trades you need to execute this position:
Buy 23 February 2023 (DOCU) $70 puts at………….………$11.10
Sell short 23 February 2023 (DOCU) $65 puts at………….$6.85
Net Cost:……………………..…………….........…..............….....$4.25
Potential Profit: $5 - $4.25 = $.75
(23 X 100 X $.75) = $1,725 or 17.65% in 18 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.
