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 - Akamai Technologies, Inc. (AKAM) – BUY
BUY Akamai Technologies, Inc. (AKAM) May 2020 $80-$85 in-the-money vertical BULL CALL spread at $4.25
Opening Trade
4-29-2020
expiration date: May 15, 2020
Portfolio weighting: 10%
Number of Contracts = 22 contracts
One of my favorite cloud plays Akamai (AKAM) has dropped following its earnings report.
Akamai Technologies, Inc. provides cloud services for delivering, optimizing, and securing content and business applications over the Internet in the United States and internationally.
Akamai has revealed a top-and-bottom-line beat for the first quarter, with Q1 Non-GAAP EPS of $1.20 beating forecasts by $0.04; and revenue of $764.3M (+8.2% Y/Y) beating by $14.55M.
The company reported superb 1Q results and 2Q guidance that was well above the Street’s expectations, and the reaction is a little bit of a “sell the news” reaction after the stock has skyrocketed up leaving no entry points for us.
If you look at a 1-year chart (attached), Akamai has rock-solid support at $85 going back to last summer.
The Nasdaq-index is up over 3% this morning after Google posted 13% year over year revenue growth in apocalyptic-like conditions and relatively positive commentary boding well for the whole tech sector going forward.
I expect FANGs to have great earnings reports with Microsoft, Amazon being the best and Facebook being the weakest.
Akamai is one of my favorite tier 2 cloud plays and its sell-off from $108 is from a new all-time high.
Buy and hold the stock if you do not do options.
Here are the specific trades you need to execute this position:
Buy 22 May 2020 (AKAM) $80 call at………….………$14.75
Sell short 22 May 2020 (AKAM) $85 call at………….$10.50
Net Cost:……………………..……..............………..…….....$4.25
Potential Profit: $5 - $4.25 = $.75
(22 X 100 X $.75) = $1,650 or 16.5%
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video on “How to Execute a Vertical Bull Call Spread” by clicking here at
http://www.madhedgefundtrader.com/ltt-vbpds/
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.
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video on “How to Execute a Vertical Bull Call Spread” 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.
