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.
Trade Alert - (AMZN) – SELL – STOP LOSS
SELL the Amazon (AMZN) August 2020 $3,300-$3,350 in-the-money vertical Bear Put spread at $32.31 or best
Closing Trade
8-18-2020
expiration date: August 21, 2020
Portfolio weighting: 10%
Number of Contracts = 3 contracts
Global Trading Dispatch is up over 32% this year so you can’t blame me when one trade doesn’t go my way.
My mentor trade alert service is constantly ranked as one of the best performing services in the industry professionally audited by one of the big 4.
Amazon is acquiring another growth asset leading shares to lurch higher by over 3% this morning.
They are in discussions to purchase cloud services company Rackspace Technology (RXT).
Owning a piece of Rackspace would theoretically be advantageous for Amazon Web Services (AWS), the lucrative cloud computing business operated by the retailer. Rackspace's core business is the leasing of server space for clients wishing to manage data on the cloud; this activity makes it a frequent business partner of AWS, although it also partners with Alphabet's Google and Microsoft.
Rackspace is currently majority-owned by alternative investment specialist Apollo Global Management (APO). Apollo acquired Rackspace in 2016 and shortly thereafter took it private. Rackspace returned to the stock market in a slightly different corporate form earlier this month following an IPO, but its stock hasn't been popular. The shares have consistently traded several dollars under their $21 IPO price.
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.
Here are the specific trades you need to exit this position:
Sell 3 August 2020 (AMZN) $3,300 puts at……................………$48.03
Buy to cover short 3 August 2020 (AMZN) $3,350 put at……….$80.34
Net Proceeds:………………………….…………..……...................….....$32.31
Loss: $42.00 - $32.31= -$9.69
(3 X 100 X -$9.69) = $2,907 or 2.30%
To see how to enter this trade in your online platform, please look at the order ticket above, which I pulled off of Interactive Brokers.
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.
