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 - Amazon.com, Inc. (AMZN) – STOP LOSS
SELL the Amazon.com, Inc. (AMZN) June 2022 $106-$116 in-the-money vertical BULL CALL spread at $6.15
Closing Trade
6-10-2022
expiration date: June 17, 2022
Portfolio weighting: 10%
Number of Contracts = 13 contracts
Amazon.com, Inc. (AMZN) just executed a 20:1 stock split and I thought they would ride the short-term momentum to perform relatively well in the short-term.
However, the high inflation number this morning means the end to the bear market rally and its bombs away for tech stocks.
Effectively, the rate hike expectations accelerate, path to lower rates/low inflation narrows, and recession risk is pulled forward.
Techs are a sell on the rally.
I expect tech markets to be highly choppy for the next few months.
Here are the specific trades you need to exit this position:
Sell to Close 13 June 2022 (AMZN) $106.00 calls at….………$8.00
Buy to Close 13 June 2022 (AMZN) $116 calls at……......…….$1.85
Net Proceeds:……………………..…….………...................…….....$6.15
Loss: $8.55-$6.15 = $2.40
(13 X 100 X $2.40) = $3,120 or 28.07%
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.
