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) – STOP LOSS
SELL Alphabet Inc. (GOOGL) March 2022 $2,490- $2,590 in-the-money vertical BULL CALL spread at $72.50
Closing Trade
2-22-2022
expiration date: March 18, 2022
Portfolio weighting: 10%
Number of Contracts = 1 contract
I am taking this short bump in early morning trading to stop out on Alphabet (GOOGL).
Nasdaq futures were down over -2.5% last night when news broke out of Russian leader Vladimir Putin ordering a “peacekeeping mission” to new breakaway states of Donbas and Luhansk.
There is still a lot of pent-up volatility underneath the surface that could erupt at any point and even a safe haven stock like GOOGL has felt the downside pressure.
We are stopping out here with a moderate loss.
Right around the corner is the Fed on tap to make a decision on interest rates, this becomes a fascinating and important time for investors to analyze how to position themselves for the rest of the year after simultaneous multiple exogenous shocks.
Here are the specific trades you need to exit this position:
Sell to Close 1 March 2022 (GOOGL) $2,490 calls at………….………$179.00
Buy to Close 1 March 2022 (GOOGL) $2,590 calls at...........……….$106.50
Net Proceeds:………..........................……………..…….……..…..…….....$72.50
Loss: $80 - $72.50 = $7.50
(1 X 100 X $7.50) = $750 or 9.4%
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.
