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 - Alphabet Inc. (GOOGL) – TAKE PROFITS
SELL Alphabet Inc. (GOOGL) February 2024 $130-$135 in-the-money vertical BULL CALL spread at $4.85
Closing Trade
2-5-2024
expiration date: February 16, 2024
Portfolio weighting: 10%
Number of Contracts = 25 contracts
After a big drop in the GOOGL earnings report, we stuck in there and GOOGL withheld the onslaught of the market turning on the Fed delaying the rate cuts and less than spectacular forecasts from some big tech companies.
I am using this small bump to exit the position close to max profits or about 85% of potential profits to be precise, and will recycle the profits into other positions.
Tech has been the killer trade so far in 2024 as the generative AI hype has proved to have legs.
Everyone else clutching on to the notion that the market is too expensive has been left in the dust.
Buy the dip in tech stocks.
Here are the specific trades you need to exit this position:
Sell to Close 25 February 2024 (GOOGL) $130 calls at…..……$14.00
Buy to Close 25 February 2024 (GOOGL) 135 calls at…..……….$9.15
Net Proceeds:……………………..…….…….................…..……........$4.85
Profit: $4.85 - $4 = $.85
(25 X 100 X $.85) = $2,125 or 21.25%
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.