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) March 2021 $510-$515 in-the-money vertical BULL call spread at $4.07
Opening Trade
3-2-2021
expiration date: March 19, 2021
Portfolio weighting: 10%
Number of Contracts = 24 contracts
This is a short-term trade that streaming company Netflix, Inc. (NFLX) will stay above the strike price of $515 in the next 17 days.
We have technical resistance at $535.
This is not a mirage, yes, it’s the same exact trade we put on last time with the same exact strike prices and Netflix’s underlying stock hovering around the same price.
We are executing this trade 17 days before expiration as opposed to 12 like we did last time giving us cheaper pricing.
Netflix call options are being bought up by the droves today with unusual options activity exploding at 4 different strike prices.
I believe NFLX shares are on the way up – it’s a great company and only a fool would not own shares in them.
In the fourth quarter, Netflix blew past the 200 million subscriber mark.
Can you believe 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, buy the stock because my yearend target is $800.
Here are the specific trades you need to execute this position:
Buy 24 March 2021 (NFLX) $510 calls at………….………$43.60
Sell short 24 March 2021 (NFLX) $515 calls at………….$39.53
Net Cost:……………………..……..................………..….….....$4.07
Potential Profit: $5 - $4.07 = $.93
(24 X 100 X $.93) = $2,232 or 22.85% in 17 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.
