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.
Trade Alert - (PANW) – BUY
BUY the Palo Alto Networks (PANW) February $260-$270 vertical BULL CALL debit spread at $8.70 or best
Opening Trade
1-10-2024
expiration date: February 16
Portfolio weighting: 10%
Number of Contracts = 12 contracts
If you can’t do options, buy the stock. My long-term target for (PANW) is $400, up 27%.
Palo Alto Networks is the class act in the cybersecurity space. Virtually every manager I know either has the stock or is trying to get into it. Today the stock is in the process of engineering a major upside breakout.
Its total addressable market is a staggering $175 billion. As I never tire of pointing out to followers, hacking never takes a break, is always growing, and is recession-proof.
Therefore, I am buying the Palo Alto Networks (PANW) February 2024 $260-$270 vertical BULL CALL debit spread at $8.70 or best.
Don’t pay more than $9.40 or you will be chasing.
This is a bet that the (PANW) will not fall below $270.00 by the February 16 option expiration in 26 trading days.
Here are the specific trades you need to execute this position:
Buy 12 February (PANW) $260 calls at………….…..…$59.00
Sell short 12 February (PANW) $270 calls at…………$50.30
Net Cost:…………………………........………..………….….....$8.70
Potential Profit: $10.00 - $8.70 = $1.30
(12 X 100 X $1.30) = $1,560 or 14.95% in 26 trading days.
If you are uncertain about 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.
