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 Alphabet Inc. (GOOGL) June 2021 $2,240-$2,250 in-the-money vertical BULL call spread at $8.73
Opening Trade
5-28-2021
expiration date: June 18, 2021
Portfolio weighting: 10%
Number of Contracts = 11 contracts
This is a short-term bet that Alphabet (GOOGL) will stay above $2,250 in the next 21 days.
It’s time to revert to high quality in a tech sector that is not cheap.
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 28% year to date in the first 6 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 execute this position:
Buy 11 June 2021 (GOOGL) $2,240 calls at………......….………$138.85
Sell short 11 June 2021 (GOOGL) $2,250 calls at……......…….$130.10
Net Cost:……………………......................…….………...........…….....$8.73
Potential Profit: $10 - $8.73 = $1.27
(11 X 100 X $1.27) = $1,397 or 14.55% in 21 days
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.
