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) – TAKE DOUBLE PROFITS
SELL Alphabet Inc. (GOOGL) July 2021 $2,310-$2,315 in-the-money vertical BULL call spread at $4.95
Closing Trade – TAKE PROFITS ON BOTH GOOGL CALL SPREADS
7-2-2021
expiration date: July 16, 2021
Portfolio weighting: 10%
Number of Contracts = 23 contracts
I am taking profits in both GOOGL call spreads with the same July 16, 2021 expiration and strike prices of $2,310-$2,315 at $4.95.
We executed two different GOOGL call spreads 5 days apart from each other, one for $4.30, and also the other for a cheaper rate of $4.20.
GOOGL has experienced positive short-term price action, with every mini-dip bought and seemingly range bound to the upper limit of the range.
This is why we are exiting the position with a favorable price and are taking profits in 20% of our portfolio with just a FB call spread left.
The underlying GOOGL stock is up to $2,480.
I am looking to reinvest my profits in GOOGL on the next dip. Big tech and ad tech are formidable forces and the goldilocks environment right now for these assets are allowing the likes of FB and GOOGL to flourish.
The rest of Big tech is starting to break out with the likes of AMZN, APPL, and FB spiking short-term. Apple is trending higher into the high $130s and AMZN trending towards $3,500.
GOOGL stock has traded above its 50-day simple moving average since Nov 2020 and I believe that will continue.
This was a short-term bet that Alphabet (GOOGL) would stay above $2,315 by July 16th expiration.
GOOGL has to be the best FANG stock right now and it is firing on all cylinders.
The company generated strong top and bottom-line growth, even after adjusting for unrealized investment gains.
GOOGL has $135 billion in cash on its balance sheet and appears to finally be buying back shares.
It has a myriad of businesses that are working perfectly from Google search, Google maps, to YouTube and hardware.
GOOGL's recent earnings report showed elevated growth. Revenue grew 34% to $55.3 billion. That included 48.7% growth at YouTube and 45.7% growth at Google Cloud.
The reason you cannot buy the dip on GOOGL is because it hardly dips at all.
This year, the price action has been nothing short of spectacular and the stock is up big year to date in the first 7 months and has delivered far beyond expectations for the first 2 earnings reports that investors have no choice but to bid up the stock.
If you don’t do options, you should be holding the stock and never sell it.
Here are the specific trades you need to exit this position:
Sell to Close 23 July 2021 (GOOGL) $2,310 calls at………….………$166.35
Buy to Close 23 July 2021 (GOOGL) $2,315 calls at……….........….$161.40
Net Proceeds:…………………….............................…….………..…….....$4.95
(For GOOGL call spread executed 6/17)
Profit: $4.95 - $4.30 = $0.65
(23 X 100 X $0.65) = $1,495 or 15.12%
(For GOOGL call spread executed 6/22)
Profit: $4.95 - $4.20 = $0.75
(23 X 100 X $0.80) = $1,725 or 17.86%
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.
