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 - CrowdStrike Holdings, Inc. (CRWD) – SELL – STOP LOSS
SELL – STOP LOSS CrowdStrike Holdings, Inc. (CRWD) February 2021 $250-$255 in-the-money vertical Bear Put spread at $4.16
Closing Trade – NOT FOR NEW SUBSCRIBERS
2-16-2021
expiration date: February 19, 2021
Portfolio weighting: 10%
Number of Contracts = 23 contracts
This was a short-term trade that software company CrowdStrike Holdings CRWD will stay BELOW the strike price of $250 by the February 19th expiration date.
I would like to first say that I am highly bullish CRWD and this, like I mentioned in the write-up, was a put position to hedge our long positions.
CRWD opened up at $249 signaling to me that it’s time to cut our losses here. The stock then dipped into the $245 range where I exited with better pricing.
CRWD is a freight train running higher which is why I executed two bull call spreads in the February expiration.
This hedge also allowed me to execute bull spreads on Netflix (NFLX), Amazon (AMZN), Apple (APPL), and Qualcomm (QCOM). All of which look well on their way to maximum profits.
Why do we like CrowdStrike Holdings CRWD?
CrowdStrike Holdings CRWD is the darling of the cybersecurity stocks. Shares were up 287% over the last year and they have consolidated somewhat recently which gives us the optimal entry point for a short-term trade.
CrowdStrike is enabling the trend toward cloud-based computing.
The cloud security leader in endpoint security, which provides protection at the device level, such as laptops, smartphones, servers, and sensors.
CrowdStrike uses artificial intelligence, machine learning, and behavioral analytics to power its threat detection system.
Each new business that joins the platform helps CrowdStrike's threat detection system become more intelligent, thereby strengthening the defense of everyone on the network.
They are no slouch with revenue expanding 86% year over year to $232.5 million in the third quarter, driven by strong customer gains.
Runway for growth is long. With the number of IoT devices set to explode to 75 billion by 2025, demand for CrowdStrike's endpoint security services should continue to grow unfettered which makes it such an attractive stock to appreciate.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Here are the specific trades you need to exit this position:
Sell to Close 23 February 2021 (CRWD) $255 puts at………….………$11.48
Buy to Close 23 February 2021 (CRWD) $250 puts at…….........…….$7.32
Net Proceeds:……………………..…….………..............................…….....$4.16
Loss: $4.32 – 4.16 = $.16
(23 X 100 X -$.16) = $368 or 3.7%
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 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.
