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 – Roku, Inc. (ROKU) – TAKE PROFITS
SELL the Roku, Inc. (ROKU) October 2023 $76-$81 in-the-money vertical BEAR PUT spread at $4.30
Closing Trade
10-9-2023
expiration date: October 20, 2023
Portfolio weighting: 10%
Number of Contracts = 24 contracts
I am taking modest profits here in my ROKU bear put spread.
ROKU didn’t have as much downward thrust as I expected.
The ZM put spread worked a lot better.
Middle Eastern conflict has meant that a quarter-point rate hike is off the table at the next Fed meeting and that’s bullish in the short term for tech stocks which are performing relatively well today with major stocks like Meta and Netflix up.
ROKU is volatile and could surge to the upside so it’s better to exit this stock with a small profit.
Here are the specific trades you need to exit this position:
Sell to Close 24 October 2023 (ROKU) $81 puts at………….………$9.80
Buy to Close 24 October 2023 (ROKU) $76 puts at………........….$5.50
Net Proceeds:……………………..…….……….........................…….....$4.30
Profit: $4.30- $4.10 = $.20
(24 X 100 X $.20) = $480 or 4.88%
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.