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 - Netflix, Inc. (NFLX) – BUY
BUY Netflix, Inc. (NFLX) February 2021 $510-$515 in-the-money vertical BULL call spread at $4.27
Opening Trade
2-5-2021
expiration date: February 19, 2021
Portfolio weighting: 10%
Number of Contracts = 23 contracts
This is a short-term trade that software company Netflix, Inc. (NFLX) will stay above the strike price of $515 in the next 15 days.
We have technical resistance at $520.
In the fourth quarter, Netflix blew past the 200 million subscriber mark.
Can you believe it that the picture is still bright for long-term subscription growth, even though CEO Reed Hastings warned during the Q4 earnings call that growth is expected to slow down drastically in the short term? But fewer than 40% of those subscribers live in North America. About 83% of Netflix's new paid subscriptions came from outside the U.S. and Canada in 2020, with Europe, the Middle East, and Africa accounting for 41% of new subscriptions.
As the migration to digital increases throughout the developing world, Netflix's subscriber base will soar.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
If you don’t do options, stand aside, this is a short-term options trade.
Here are the specific trades you need to execute this position:
Buy 23 February 2021 (NFLX) $510 calls at………….………$42.82
Sell short 23 February 2021 (NFLX) $515 calls at………….$38.55
Net Cost:……………….....................……..…….….……..…….....$4.27
Potential Profit: $5 - $4.27 = $.73
(23 X 100 X $.73) = $1,679 or 17.10% in 15 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.
