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) – SELL – STOP LOSS
SELL – STOP LOSS Netflix, Inc. (NFLX) October 2023 $355-$360 in-the-money vertical BULL CALL spread at $2.85
ClosingTrade
10-12-2023
expiration date: October 20, 2023
Portfolio weighting: 10%
Number of Contracts = 25 contracts
NFLX is down another 7% in the last few days and it’s time to dump it as the underlying stock has hit our upper strike price.
NFLX is down a total of 20% in the past month and its price action has been highly disappointing.
Apple has held up a lot better.
Rates and tech have gone up together this year, but that pairing has had a tough struggle lately as black swan events keep popping up like the war in the Middle East.
I would keep trading to a minimum as much of tech's run-up this year has been booked and the macro event has an outsized sway on moving tech stocks right now.
We are now waiting on whether the war spreads and becomes a bigger regional event which would make the trading environment even less certain.
Here are the specific trades you need to exit this position:
Sell to Close 25 October 2023 (NFLX) $355 calls at….………$19.00
Buy to Close 25 October 2023 (NFLX) $360 calls at………….$16.15
Net Proceeds:……………………..….............……………….…….....$2.85
Loss: $3.70 - $2.85 = $0.85
(25 X 100 X 0.85) = $2,125 or 22.98%
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.
