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 - Intel Corporation (INTC) – BUY
BUY Intel Corporation (INTC) January 2021 $54-$57 in-the-money vertical BEAR put spread at $2.66
Opening Trade
1-6-2021
expiration date: January 15, 2021
Portfolio weighting: 10%
Number of Contracts = 37 contracts
This is a short-term trade that semiconductor company Intel Corporation (INTC) won’t rise above $54 in 9 days.
Despite a general boom in technology stocks last year, one big notable exception has been Intel (NASDAQ:INTC). Long known as the dominant player in the computer processor space, I witnessed its moat against rivals deteriorate further this year due to internal technology problems, and the stock has responded by falling 14.7% in 2020, including dividends. That's a huge underperformance against the semiconductor sector, which gained a whopping 55.5% last year.
Even with activist investors attempting to rock the boat, I think Intel has come too far too fast and I wouldn’t buy the stock either on this one.
There is resistance at $53 and this is just a short-term trade. Traders should cut losses if the trade breaks through the $54 price strike.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES AND DO NOT BUY THE STOCK.
Here are the specific trades you need to execute this position:
Buy 37 January 2021 (INTC) $57 puts at………….………$5.42
Sell short 37 January 2021 (INTC) $54 puts at………….$2.76
Net Cost:……………………..…….………..…….....................$2.66
Potential Profit: $3.00 - $2.66 = $.34
(37 X 100 X $.34) = $1,258 or 12.78% in 10 days
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.
