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) October 2020 $1,590-$1,600 in-the-money vertical BEAR put spread at $8.75
Opening Trade
10-1-2020
expiration date: October 16, 2020
Portfolio weighting: 10%
Number of Contracts = 11 contracts
This is a short-term put spread that GOOGL will go sideways to down by October expiration.
We are up in the nosebleed section right now and it is dangerous to trot out a portfolio of all long positions. The FANGs could slow down their rapid run up and even if they go dead, then that is great for our positions.
Government bailout money has dried up. What has been handed out has been done so incompetently. Only 6% of small companies were able to qualify for the Paycheck Protection Program. States are running out of money to pay unemployment benefits.
The catalysts for another leg up our diminishing and the anti-trust winds aren’t going to help Google as well as the anti-competitive rhetoric is amped on before the election.
A Senate panel voted Thursday to subpoena the chief executive officers of Facebook Inc., Alphabet Inc.’s Google, and Twitter Inc. to testify on a legal shield that’s key to the business models of the internet giants. The Senate Commerce Committee moved unanimously to compel appearances by Mark Zuckerberg, Sundar Pichai, and Jack Dorsey after failing to reach agreements with the companies to send the CEOs voluntarily.
The vote reflects increasing bipartisan concern in Washington about the power of the technology platforms. The committee is also planning to ask the CEOs about a federal privacy law and media consolidation.
I am just dipping my toes back in the water as the overall trading environment is precarious at best.
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.
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 11 October 2020 (GOOGL) $1,600 put at………….….……$117.35
Sell short 11 October 2020 (GOOGL) $1,590 put at………….$108.60
Net Cost:……………………..…….……….............................…….....$8.75
Potential Profit: $10 - $8.75 = $1.25
(11 X 100 X $1.25) = $1,375 or 14.285%
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 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.
