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 - Facebook, Inc. (FB) – SELL – TAKE PROFITS
SELL - Facebook, Inc. (FB) July 2021 $325-$330 in-the-money vertical BULL CALL spread at $4.90
Closing Trade – NOT FOR NEW SUBSCRIBERS
7-9-2021
expiration date: July 16, 2021
Portfolio weighting: 10%
Number of Contracts = 22 contracts
This was a trade that Facebook, Inc. (FB) stock would stay above $330 by July 16th expiration, and I will take profits now at $4.90 before we get to the July 16th expiration.
FB has rebounded from the 2% intraday decline yesterday with a nice little lift this morning and I will secure profits now with the intention of getting back in this name with another call spread at a possible August expiration.
After FB’s "partial victory" in court and "stellar" results driven by advertising strength, I went ahead and executed an in-the-money bull call spread in FB to take advantage of the short-term momentum in this name.
Investors must love the stock but hate the company. I know I do.
Ad tech stocks like GOOGL and FB are highly profitable because not only have they secured duopolies in their respective industry, but they don’t need to source material to build products in an inflationary environment and they are at the vanguard of the work-from-home movement.
The reopening of the U.S. should enrich GOOGL and FB even more and most importantly in an accelerated fashion which is the catalyst for higher shares prices.
Short-term, these dips are traders’ dreams, and it is time to strike while the iron is hot. I am looking to get back into GOOGL and FB again on the next dip.
Here are the specific trades you need to exit this position:
Sell to Close 22 July 2021 (FB) $325 calls at………….………$24.50
Buy to Close 22 July 2021 (FB) $330 calls at………........….$19.60
Net Proceeds:……………..............………..…….………..……......$4.90
Profit: $4.90 - $4.45 = $.45
(22 X 100 X $.45) = $990 or 10.11%
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.
