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 - Invesco QQQ Trust (QQQ) – BUY
BUY Invesco QQQ Trust (QQQ) March 2022 $365-375 in-the-money vertical BEAR PUT spread at $8.40
Opening Trade
2-18-2022
expiration date: March 18, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
Major broad-based risk-off move in the markets going on and the Nasdaq is getting crushed.
Prospects are looking pretty poor in the short-term as the U.S. Central Bank might have to execute a 50 basis point rise and the markets are really sniffing out the hawkishness.
I honestly tried to get into Bear Put Spreads on Pelton (PTON) and Pinterest (PINS) but pricing is expensive right now as the Nasdaq falls to pieces.
Growth tech is in trouble and Roku down 28% as we speak epitomizes the fall from grace that many hyper-growth tech stocks are experiencing right now.
So this all adds up to me shorting the Nasdaq as I do believe we still have room to run on the short side, things are looking a lot worse than anyone imagined.
This bear-put spread option trade is a short-term wager that QQQ will not rise above $365 in the next 26 days.
Here are the specific trades you need to execute this position:
Buy 12 March 2022 (QQQ) $375 puts at………….………$34.10
Sell short 12 March 2022 (QQQ) $365 puts at………….$25.70
Net Cost:……………………..……................………..…….....$8.40
Potential Profit: $10 - $8.40 = $1.60
(12 X 100 X $1.60) = $1,920 or 19.05% in 26 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.
