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 the Alphabet Inc. (GOOGL) June 2020 $1,495-$1,500 in-the-money vertical BEAR put spread at $3.85
Closing Trade – NOT FOR NEW SUBSCRIBERS
6-11-2020
expiration date: June 19, 2020
Portfolio weighting: 10%
Number of Contracts = 23 contracts
This was a short-term put spread that GOOGL will go sideways to down by June expiration.
Readers should remember that this was an expendable hedge against our massive GOOGL call spread that will earn readers over $4,000 if the underlying stock is over $1,285 on the 19th.
I then loaded up on Akamai and Salesforce and these bullish positions are still doing well albeit with a big risk-off day today.
I thought Google would flat line and we would be able to cherry-pick profits between these strikes, but tech has been relentless, and I am using this down day to cut losses.
There is no trader who should be too bearish on tech stocks.
Every bout of weakness is met with a resounding wave of fresh buying and that is why our portfolio is set up to gain from upside momentum.
Unfortunately, this put spread is a small sacrifice to make for 3 call spreads that are in prime position to finish with maximum profits.
This might be the last or second last day to get out of the Google put spread before expiration with limited losses and I am taking this offer up.
As the economy re-opens, the upside breakout opportunities increase and it appears that no matter how bad a “second wave” hits U.S. shores, the government is hellbent on re-manufacturing growth as we head into the November election.
Tech will lead to the upside in any scenario and if we do find ourselves in an “at home economy” again, then of course, tech is the outsized winner.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Here are the specific trades you need to execute this position:
Sell 23 June 2020 (GOOGL) $1,500 put at…….....…….………$82.80
Buy to cover short 23 June 2020 (GOOGL) $1,495 put at….$78.95
Net Proceeds:……………………..…….………...................…….....$3.85
Loss: $4.35 - $3.85 = -$0.50
(23 X 100 X $0.50) = $1,150 or 11.50%
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 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.
