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 - Lyft, Inc. (LYFT) – BUY
BUY Lyft, Inc. (LYFT) February 2022 $43-46 in-the-money vertical BEAR PUT spread at $2.45
Opening Trade
1-27-2022
expiration date: February 18, 2022
Portfolio weighting: 10%
Number of Contracts = 39 contracts
I am using this bump to sell short ride-sharing company LYFT (LYFT).
Lyft is a chronic underperformer to the Nasdaq as I see GOOGL up around 2% today along with MSFT which is up over 3%. Jump into the high quality and avoid the Pelotons of the world.
Balance sheets matter right now!
These marginal tech stocks won’t perform well in the next meltdown.
Also, people have decided to buy their own car and drive around along with ride-sharing companies unable to find labor. This company has no pricing power because people simply won’t take an Uber if the price is high.
Don’t buy this stock – if anything, sell the rallies like we are doing here.
This bear put spread options trade is a short-term wager that LYFT will not rise above $43 in the next 23 days.
Here are the specific trades you need to execute this position:
Buy 39 February 2022 (LYFT) $46 puts at………….………$10.20
Sell short 39 February 2022 (LYFT) $43 puts at…..……….$7.75
Net Cost:……………………..…….………..…....................….....$2.45
Potential Profit: $3 - $2.45 = $.55
(39 X 100 X $.55) = $2,145 or 22.25% in 23 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.
