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 - Netflix, Inc. (NFLX) – TAKE PROFITS
SELL TAKE PROFITS Netflix, Inc. (NFLX) February 2023 $335-$340 in-the-money vertical BULL CALL spread at $4.98
Closing Trade
2-3-2022
expiration date: February 17, 2023
Portfolio weighting: 10%
Number of Contracts = 24 contracts
This was a short-term mildly bullish trade on media content company NFLX that NFLX would stay above $340.
Don’t fight the fed – that should be your mantra and even more so after the Fed green-lighted growth tech with its pitiful try at talking the market down with its .25% rate hike.
Off to the races and NFLX benefited big time.
NFLX had an ok earnings report but the interest rate policy reaction is driving up tech stocks in the short-term.
NFLX added 7.7 million subscribers which isn’t bad considering the content quality has nosedived.
It could be that viewers just like watching bad NFLX content. Momentum drives this tech stock higher.
Well done and onto the next tech trade.
Readers should be chomping at the bit to buy the dip in high beta tech moving forward.
Here are the specific trades you need to execute this position:
Sell to Close 24 February 2023 (NFLX) $335 calls at………….………$38.80
Buy to Close 24 February 2023 (NFLX) $340 calls at………........….$33.82
Net Proceeds:……………………..…….………..............................…….....$4.98
Profit: $4.98 - $4 = $0.98
(24 X 100 X $0.98) = $2,352 or 23.52%
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.
