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 - Alphabet Inc. (GOOGL) – BUY
BUY Alphabet Inc. (GOOGL) March 2020 $1,445-$1,470 in-the-money vertical BULL call spread at $20.20
Opening Trade
2-19-2020
expiration date: March 20, 2020
Portfolio weighting: 10%
Number of Contracts = 5 contracts
This is a short-term trade that Alphabet (GOOGL) will stay above 1,470 or won’t drop 3.8% from the current market price.
I wanted to get into Google with my last Facebook trade but prices ran away from me.
The coronavirus is scaring investors into tech growth stocks buttressed with bulletproof balance sheets.
Google had a mixed earnings report but we are really trying to nitpick the flaws of a beauty queen and the strength in shares will continue as the coronavirus threat moderates.
Alphabet has little exposure to Wuhan or Mainland China because they chose to leave a long time ago.
They have an office in Hong Kong and people are camped out using Google as they are locked in.
Google has told workers to work remotely and the stock won’t be hit hard like my current put spread on TripAdvisor.
If you don’t do options, Alphabet is a great buy and hold stock.
Here are the specific trades you need to execute this position:
Buy 5 March 2020 (GOOGL) $1,445 call at………….………$92.10
Sell short 5 March 2020 (GOOGL) $1,470 call at………….$71.90
Net Cost:…………………..................…..…….………..…….....$20.20
Potential Profit: $25 - $20.20 = $4.80
(5 X 100 X $4.80) = $2,400 or 24.00% in 30 days
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.
