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 - Adobe Inc. (ADBE) – BUY
Buy Adobe Inc. (ADBE) April 2024 $465-$475 in-the-money vertical BULL CALL spread at $7.55
Opening Trade
3-21-2024
expiration date: April 19, 2024
Portfolio weighting: 10%
Number of Contracts = 13 contracts
Adobe (ADBE) is dropping today on the Apple DOJ investigation. The stock is down around 2% while the overall Nasdaq index is trading higher.
I believe the second tier of software companies will do well in the short-term so I am willing to buy the dip here on ADBE.
ADBE had quite a drop recently on a poor earnings report and cratered around 13%.
I was able to take profits in my call spread before that report and now I am redeploying capital in ADBE in expectation of dip buying price action.
I admit that breaching its 200-day moving average is not a great technical signal, but I believe this company will find buyers at this level.
Don’t pay more than $7.80.
Here are the specific trades you need to execute this position:
Buy to Open 13 April 2024 (ADBE) $465 calls at………….………$49.35
Sell to short 13 April 2024 (ADBE) $475 calls at…………..........$41.80
Net Cost:……………………..…….………..……...................................$7.55
Potential Profit: $10 - $7.55 = $2.45
(13 X 100 X $2.45) = $3,185 or 32.45% in 29 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.
