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 2023 $335-$340 in-the-money vertical BULL CALL spread at $4.00
Opening Trade
1-27-2023
expiration date: February 17, 2023
Portfolio weighting: 10%
Number of Contracts = 24 contracts
This is a short-term mildly bullish trade on media content company NFLX that NFLX will stay above $340 in the next 21 days.
Don’t fight the fed – that should be your mantra.
That’s why I need to add a bullish position in tech as every investor and their mother are betting on a more dovish fed.
We have finished the rate hikes and barring an about-face from the Fed, the next move would be lower which is even more dovish.
That is what is driving sentiment now and tech stocks are roaring higher. We received another in-line inflation number and tech stocks have used that as a reason to go higher.
NFLX added 7.7 million subscribers which isn’t bad considering the content quality has nosedived.
It could be that viewers just like watching bad NFLX content. Momentum drives this tech stock higher.
Here are the specific trades you need to execute this position:
Buy 24 February 2023 (NFLX) $335 calls at………….….……$33.00
Sell short 24 February 2023 (NFLX) $340 calls at………….$29.00
Net Cost:………………..................……..…….…….....…..…….....$4.00
Potential Profit: $5 - $4 = $1.00
(24 X 100 X $1.00) = $2,400 or 25.00% in 21 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.
