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) – BUY
Buy Carvana Co. (CVNA) September 2024 $155-$160 in-the-money vertical BEAR PUT spread at $4.20
Opening Trade
9-5-2024
expiration date: September 20, 2024
Portfolio weighting: 10%
Number of Contracts = 24 contracts
This is a quick short-term trade in digital used car platform stock Carvana that CVNA won’t climb above $155 in 15 calendar days.
The data has been quite soft lately specifically the employment numbers.
It appears as if inflation has really beaten down the consumers and I feel that CVNA has peaked in the short term and the underlying stock should trend down in the short term.
At this time, I am also looking to short Tesla stock because I believe the short-term price action bodes ill for the stock.
September is usually a seasonally weak month.
Don’t pay more than $4.35.
Here are the specific trades you need to execute this position:
Buy to Open 24 September 2024 (CVNA) $160 puts at…………$20.40
Sell to short 24 September 2024 (CVNA) $155 puts at………….$16.20
Net Cost:……………………..…….………..……....................,.............$4.20
Potential Profit: $5 - $4.20 = $0.80
(24 X 100 X $0.80) = $1,920 or 19.05% in 15 days
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.
