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 - Carvana Co. (CVNA) – BREAK EVEN
SELL Carvana Co. (CVNA) September 2024 $155-$160 in-the-money vertical BEAR PUT spread at $4.20
Closing Trade
9-16-2024
expiration date: September 20, 2024
Portfolio weighting: 10%
Number of Contracts = 24 contracts
This was a quick short-term trade in digital used car platform stock Carvana that (CVNA) wouldn’t climb above $155.
The volatility was off the charts for this trade and the stock has rallied big time in the past few days which translates into a gain of more than $20.
There was yet another analyst upgrade in this stock this morning and it’s time to close this trade at break-even.
The trading environment continues to be heavily uncertain with many waiting for the November election to be over.
This trade started very positively with big drops in the stock, but that reversed and we are cutting it before the stock goes ballistic on us.
Here are the specific trades you need to exit this position:
Sell to Close 24 September 2024 (CVNA) $160 puts at……….…$12.40
Buy to Close 24 September 2024 (CVNA) $155 puts at……..…….$8.20
Net Proceeds:……………………..…….………..……...........................$4.20
Net Gain or Loss: $4.20- $4.20 = $0.00
(24 X 100 X $0.00) = $0
If you are uncertain about 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.
