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 – DocuSign, Inc. (DOCU) – SELL – TAKE PROFITS
SELL TAKE PROFITS DocuSign, Inc. (DOCU) February 2023 $65-$70 in-the-money vertical BEAR PUT spread at $4.40
Closing Trade
2-1-2023
expiration date: February 17, 2023
Portfolio weighting: 10%
Number of Contracts = 23 contracts
I executed a short-term trade that underlying shares of DOCU would stay below $65 by February expiration.
Tech shares are reacting positively to Jerome Powell’s 25 basis point rate hike.
He didn’t do anything overly hawkish and the market could bounce so I am taking this small dip in DOCU to take modest profits.
Here are the specific trades you need to execute this position:
Sell to Close 23 February 2023 (DOCU) $70 puts at…………………$10.70
Buy to Close 23 February 2023 (DOCU) $65 put at………...........….$6.30
Net Proceeds:……………………..…….………..…..........................….....$4.40
Profit: $4.40 - $4.25 = $.15
(23 X 100 X $.15) = $345 or 3.53%
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.
