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 Meta Platforms, Inc. (META) March 2023 $200-$205 in-the-money vertical BEAR PUT spread at $4.65
Closing Trade
3-14-2023
expiration date: March 17, 2023
Portfolio weighting: 10%
Number of Contracts = 22 contracts
META is up big this morning as the bank contagion occurring in the mid-tier banking sector combined with this morning’s CPI report coming in bang on consensus means that investors expect interest rates to drastically moderate in the short term.
This is highly bullish for tech shares and why our profits in this META trade dissipated somewhat. We are still taking modest profits and were able to add aggressive long positions to the tech portfolio.
Here are the specific trades you need to exit this position:
Sell to Close 22 March 2023 (META) $205 puts at...………$13.45
Buy to Close 22 March 2023 (META) $200 puts at………….$8.80
Net Proceeds:……………………..…….……….................…….....$4.65
Profit: $4.65- $4.50 = $.15
(22 X 100 X $.15) = $330 or 3.33%
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.
