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 - Meta Platforms, Inc. (META) – TAKE PROFITS
SELL the Meta Platforms, Inc. (META) January 2023 $140-$145 in-the-money vertical BEAR PUT spread at $4.95
Closing Trade
12-15-2022
expiration date: January 20, 2023
Portfolio weighting: 10%
Number of Contracts = 22 contracts
This was a tactical trade in personal data re-selling company Meta Platforms, Inc. (META) that META would not rise above $140 in the next 37 days.
I faded a big pop in META shares.
Right on schedule, tech shares are selling off with META down over 4% this morning and I am cashing in right here.
The US Central Bank signaled to investors they will keep interest rates higher for longer and that is highly negative for growth stocks.
I believed this trade was a good entry point to sell META shares in the short term and I was absolutely correct in my assumptions.
Here are the specific trades you need to exit this position:
Sell to Close 22 January 2023 (META) $145 puts at…..………$28.85
Buy to Close 22 January 2023 (META) $140 puts at………….$23.90
Net Proceeds:……………………..……..................………..…..….....$4.95
Profit: $4.95 - $4.50= $.45
(22 X 100 X $.45) = $990 or 10.00%
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.
