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 - ARK Innovation ETF (ARKK) – BUY
BUY the ARK Innovation ETF (ARKK) July 2022 $49-$54 in-the-money vertical BEAR PUT spread at $3.95
Opening Trade
6-27-2022
expiration date: July 15, 2022
Portfolio weighting: 10%
Number of Contracts = 25 contracts
This is a tactical trade on Cathie Wood’s ARK Innovation ETF (ARKK) that (ARKK) will not rise above $49 in the next 18 days.
More aggressive traders can roll down strike prices to $48.
This is a very short-term trade and highly tactical.
With several wholesale price surveys and retail sales numbers coming out later this week, I believe in the very short-term we are overbought and could level out and ARKK could neutralize because of this.
Here are the specific trades you need to execute this position:
Buy 25 July 2022 (ARKK) $54 puts at………….………$9.50
Sell short 25 July 2022 (ARKK) $49 puts at………….$5.55
Net Cost:……………………..…….………..…............….....$3.95
Potential Profit: $5 - $3.95= $1.05
(25 X 100 X $1.05) = $2,625 or 26.58% in 18 days
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.
