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 – TAKE PROFITS
SELL TAKE PROFITS Alphabet Inc. (GOOGL) November 2021 $2,600-$2,620 in-the-money vertical BULL call spread at $19.90
Closing Trade
10-27-2021
expiration date: November 19, 2021
Portfolio weighting: 10%
Number of Contracts = 6 contracts
This was a short-term bet that Alphabet (GOOGL) would stay above $2,620 by November 19th expiration and we are taking profits after a stellar earnings report that came out after yesterday's close.
We hit the ball out of the park on this! Well done and on to the next trade.
GOOGL shares are up over 6% this morning.
GOOGL reported third-quarter results that exceeded Wall Street's expectations as the technology giant saw a resurgence in its search business with travel activity ramping back up.
Alphabet has so far been the best performer this year among Big Tech, with shares growing nearly 57% for the year-to-date through Tuesday's close. Unlike many other technology companies, Alphabet has been viewed as a key beneficiary of the reopening trade, given it stands to gain from a pick-up in travel-related searches and advertising on Google Search.
Search has remained by far the biggest contributor to Alphabet's overall top-line growth, with the business unit growing 44% to bring in $37.9 billion in revenue in the third quarter, before traffic-acquisition costs.
Other parts of the business have also been growing quickly and have comprised areas of opportunity for Alphabet to continue building out. YouTube ad sales grew 43% to top $7.2 billion in revenue in the third quarter. Google Cloud grew sales 45% to reach nearly $5 billion.
I am bullish tech going into the debt ceiling event of December.
Like I thought, GOOGL has been one of the tech’s best performers in 2021 and it should finish the year strongly.
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 6 November 2021 (GOOGL) $2,600 calls a.….………$374.65
Buy to Close 6 November 2021 (GOOGL) $2,620 calls at………….$354.75
Net Proceeds:…………........................…………..…….………..…….......$19.90
Profit: $19.90 - $16.45 = $3.45
(6 X 100 X $3.45) = $2,070 or 20.97%
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.
