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 - Airbnb, Inc. (ABNB) – BUY
Buy Airbnb, Inc. (ABNB) April 2023 $100-$105 in-the-money vertical BULL CALL spread at $4.00
Opening Trade
3-13-2023
expiration date: April 21, 2023
Portfolio weighting: 10%
Number of Contracts = 25 contracts
The pendulum has swung to the other end after contagion rocked the tech markets.
I believe the conditions are primed for a melt-up and growth tech will benefit from the repricing to lower interest rates.
Remember that technology stock valuation is the most sensitive to changes in interest rate perception.
The market believes that Powell will hike only .25%, down from the .5%.
The market is also pricing in a .25% Fed Funds rate cut for June and July.
The bearish news is largely sanitized in the short term and that is why tech shares are off to the races this morning.
I want to participate in this upcoming tech rally by buying some short-term hotel share firm Airbnb.
Don’t pay more than $4.12.
Here are the specific trades you need to execute this position:
Buy to Open 25 April 2023 (ABNB) $100 calls at….……$19.20
Sell to short 25 April 2023 (ABNB) 105 calls at………….$15.20
Net Cost:……………………..................…….………....…….....$4.00
Potential Profit: $5 - $4 = $1.00
(25 X 100 X $1.00) = $2,500 or 25.00% in 39 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.
