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.
Trade Alert - (GOOGL) – TAKE PROFITS
SELL the Alphabet (GOOGL) September 2019 $1,030-$1,080 in-the-money vertical BULL CALL spread at $48.50 or best
Closing Trade – NOT FOR NEW SUBSCRIBERS
8-27-2019
expiration date: September 20, 2019
Portfolio weighting: 10%
Number of Contracts = 2 contracts
I am going to use the 550-point rally of the past two days to take profits on one of my tech longs. With this kind of volatility, you don’t let profitable positions grow hair on them. Just close you eyes and buy the down days and sell the up days.
I am therefore selling Alphabet (GOOGL) September 2019 $1,030-$1,080 in-the-money vertical BULL CALL spread at $48.50 or best. By coming out here you get to earn $1,500, or 18.29% in 11 trading days. That presents 83.33% of the maximum $9.00 profit.
This is one of the dominant cloud players whose share price has been temporarily beaten down because of unwarranted fears of regulation and antitrust action. Most congressmen don’t even know what Alphabet does.
I believe the 200-day moving average will provide major support over the next month or so. In addition, there is a “Golden Cross” setting up where the 50-day moving average is about to move up through the 200-day average.
This was a bet that Alphabet (GOOGL) will not trade below $1,080 by the September 20 option expiration day in 29 trading days.
If you bought the stock, keep it for the long term. This is a chance to own one of the preeminent cloud plays at a bargain price.
Here are the specific trades you need to exit this position:
Sell 2 September 2019 (GOOGL) $1,030 calls at……..........…….…$149.00
Buy to cover short 2 September 2019 (GOOGL) $1,080 calls at...$100.50
Net Cost:………………………….………..………….…...............................$48.50
Profit: $48.50 - $41.00 = $7.50
(2 X 100 X $7.50) = $1,500 or 18.29% in 11 trading days.
To see how to enter this trade in your online platform, please look at the order ticket above, 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 Vertical Call and Put Debit Spreads by clicking here.
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Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
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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 close to expiration.
If you don't get done, don't worry. There are another 250 Trade Alerts coming at you over the coming 12 months.
