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 - Fiserv, Inc. (FISV) - BUY
BUY Fiserv, Inc. (FISV) May 2020 $110-$115 in-the-money vertical BEAR put spread at $4.50
Opening Trade
4-20-2020
expiration date: May 15, 2020
Portfolio weighting: 10%
Number of Contracts = 22 contracts
This is a short-term trade that hedges our other long position in Fiserv, Inc. (FISV).
Tech has been an outsized winner because of the coronavirus but Fiserv isn’t displaying the type of price action I thought it would and is down another 3% today.
Granted that Fiserv had an outstanding trading day on Friday moving up 5%, but when you parlay the negative price action on top of the Fed not being able to get more stimulus through, then I believe this is a good hedge on a stock that has limited upside.
The risk – rewards to this trade is quite favorable.
If you don’t do options, stand aside.
Here are the specific trades you need to execute this position:
Buy 22 May 2020 (FISV) $115 put at………….………$17.55
Sell short 22 May 2020 (FISV) $110 put…………....$13.05
Net Cost:……………………..…….………..……...............$4.50
Potential Profit: $5 - $4.50 = $0.50
(22 X 100 X $0.50) = $1,100 or 11.00%
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video on “How to Execute a Vertical Bull Call Spread” by clicking here at
http://www.madhedgefundtrader.com/ltt-vbpds/
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.
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video on “How to Execute a Vertical Bull Call Spread” 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.
