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 - Datadog, Inc. (DDOG) – BUY
Buy Datadog, Inc. (DDOG) April 2023 $50-$55 in-the-money vertical BULL CALL spread at $4.30
Opening Trade
3-20-2023
expiration date: April 21, 2023
Portfolio weighting: 10%
Number of Contracts = 23 contracts
Buying a short-dated call spread on cyber security firm Datadog, Inc. (DDOG).
DDOG has given back 5 days of gains here and in an environment where the Fed cannot raise rates more than expected in the short-term, growth tech is an unequivocal buy the dip.
This adds to our long positions in ABNB and PINS.
Traders should be buying the dip of any pullback and investors should be loading the boat of the behemoths.
Don’t pay more than $4.39.
Here are the specific trades you need to execute this position:
Buy 23 April 2023 (DDOG) $50 calls at………….………$16.15
Sell short 23 April 2023 (DDOG) $55 calls at………….$11.85
Net Cost:……………………..…….…............ ……..…….....$4.30
Potential Profit: $5 - $4.30 = $.70
(23 X 100 X $.70) = $1,610 or 16.28% in 32 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.
