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) – TAKE PROFITS
SELL the Airbnb, Inc. (ABNB) November 2022 $95-$100 in-the-money vertical BULL CALL spread at $4.25
Closing Trade
10-25-2022
expiration date: November 18, 2022
Portfolio weighting: 10%
Number of Contracts = 29 contracts
I’m taking profits here in ABNB and leaving 47% of the potential profits on the table.
The bear market rally has run its course with the Nasdaq index popping over 9%.
ABNB popped as well reaching $120 but has come down a little since then.
The market is now pricing in .25% less of a Fed Funds rate which is a signal that investors all expect the Fed to pivot which is why there has been such a strong surge in tech stocks. I doubt there will be yet another downward re-pricing of .25% after the latest .25% reduction.
I can reposition at better prices in many tech stocks shortly.
Here are the specific trades you need to exit this position:
Sell to Close 29 November 2022 (ABNB) $95 calls at………….………$22.25
Buy to Close 29 November 2022 (ABNB) $100 calls at……......…….$18.00
Net Proceeds:………………...........................……..…….………....…….....$4.25
Profit: $4.25-$3.40 = $0.85
(29 X 100 X $0.85) = $2,465 or 25.00%
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.
