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 the Alphabet Inc. (GOOGL) June 2020 $1,495-$1,500 in-the-money vertical BEAR put spread at $4.50
Opening Trade
5-13-2020
expiration date: June 19, 2020
Portfolio weighting: 10%
Number of Contracts = 22 contracts
This is a short-term put spread that GOOGL will go sideways to down by June expiration.
This has been a wild day with big tech taking profits and to balance out our call spread, I am executing another deep-in-the-money put spread on Google.
We are in the nosebleed section right now and in no way, shape, or form should anyone be 100% long with no protection.
I would be inclined to add another put spread if Google has a nice bounce as well.
Long term, this is a great company, but this is just a short-term position.
We have recently taken in a raft of new subscribers and welcome to the beginning of your trading journey in the strongest sector the public markets have to offer.
Prices are all over the map today and newbies should practice paper trading before they put real capital to work. Do not chase prices if they run away.
If there is more consolidation in Google, cutting losses in the call spread will be warranted. Capital preservation is the call of the day.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Here are the specific trades you need to execute this position:
Buy 22 June 2020 (GOOGL) $1,500 put at………….………$159.60
Sell short 22 June 2020 (GOOGL) $1,495 put at………….$155.10
Net Cost:………………….....................…..…….………..…….....$4.50
Potential Profit: $5 - $4.50 = $0.50
(22 X 100 X $0.50) = $1,100 or 11.00%
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 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.
