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) – SELL – STOP LOSS
SELL Alphabet Inc. (GOOGL) March 2020 $1,445-$1,470 in-the-money vertical BULL call spread at $10.80
Closing Trade
2-24-2020
Expiration date: March 20, 2020
Portfolio weighting: 10%
Number of Contracts = 5 contracts
Fidelity is experiencing technical issues this morning, and so are we as the markets go haywire and we try to send readers this stop loss order.
Tech stocks are getting crushed, which is why our portfolio was only 20% invested.
The coronavirus has spread to Italy and South Korea and has freaked out tech shares in the short term.
Though the virus has nothing to do with Google or my other position, PayPal, with markets in free fall, we must cut half the portfolio to 10%.
Google and PayPal’s business model aren’t in the eye of the storm like semiconductor companies, Apple, or Cisco Systems.
I will be carefully monitoring PayPal from here on out.
Notably, this wipes away my yearly performance and is a great example of only investing a small part of your portfolio when markets are at high risk.
Google remains a great company and once things calm down, this will be had for a discount.
Markets are extremely volatile and readers should execute limit orders.
Here are the specific trades you need to execute this position:
Sell 5 March 2020 (GOOGL) $1,445 call at……..............…….……$33.35
Buy to cover short 5 March 2020 (GOOGL) $1,470 call at………..$22.55
Net Proceeds:………….........................…………..…….………..……...$10.80
Loss: $20.20 - $10.80 = $9.40
(5 X 100 X $9.40) = -$4,700 or -47.00%
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.
You must be logged into your account to view the video.
Things to Keep in Mind
Remember, these are ballpark prices only. There is no telling how much the market can move by the time you get this.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In todays market, investors need every advantage they can get.
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 it done, don't worry. There are another 250 Trade Alerts coming at you over the coming 12 months.
