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 - Intuit Inc. (INTU) – BUY
BUY Intuit Inc. (INTU) February 2021 $340-$345 in-the-money vertical BULL call spread at $4.40
Opening Trade
1-22-2021
expiration date: February 19, 2021
Portfolio weighting: 10%
Number of Contracts = 22 contracts
This is a short-term trade that software company Intuit Inc. (INTU) will stay above the strike price of $345 in the next 29 days.
Intuit's array of services work like a gem in the remote-work world that the pandemic thrust all of us into.
Intuit’s revenue and adjusted operating profit grew 13% and 17%, respectively, in fiscal 2020 to $7.68 billion and $2.18 billion. And fiscal Q1 2021 (the three months ended Oct. 31, 2020) revenue and adjusted operating income increased 14% and 159% from a year ago, the latter metric getting a big boost as Intuit's bottom line rebounds off of low profitability in the last couple years as the software company has invested heavily to promote growth.
Intuit continues to be a stalwart that connects the world to financial advice and should be a growth story for the foreseeable future.
With a trailing 12-month revenue of $7.8 billion, this is still a relatively small company when compared to the massive financial services industry it operates in, which is worth over a trillion dollars in annual spending in the U.S.
As of the end of October 2020, the company had $5.79 billion in cash, equivalents, and short-term investments, and only $2.36 billion in debt.
Even better, they acquired the website Credit Karma and continues to plough ahead with their solid balance sheet.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
If you don’t do options, stand aside.
Here are the specific trades you need to execute this position:
Buy 22 February 2021 (INTU) $340 calls at………….………$38.55
Sell short 22 February 2021 (INTU) $345 calls at………….$34.15
Net Cost:…………....................…………..…….…..……..…….....$4.40
Potential Profit: $5 - $4.4 = $.6
(22 X 100 X $.6) = $1,320 or 13.6% in 29 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.
