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) – SELL – TAKE PROFITS
SELL TAKE PROFITS the Netflix, Inc. (NFLX) September 2022 $247.50-$252.50 in-the-money vertical BEAR PUT spread at $4.65
Closing Trade
9-1-2022
expiration date: September 16, 2022
Portfolio weighting: 10%
Number of Contracts = 24 contracts
This was a bet that NFLX would stay below $247.50 in 17 days and I am taking profits here and leaving some potential profits on the table.
Truth be told, NFLX should be lower, but its management keeps manipulating the stock higher by publicly reporting today that NFLX is “serious about ramping up ad efforts.”
The day before, NFLX popped 4.5% on news that it poached two of SNAP's ad executives.
However, the stock gave up gains for the rest of the day showing how poor the price action is in NFLX.
This business is a dumpster fire with terrible content and bereft of the old hits like Seinfeld or Friends, they are now repurposing old Japanese anime with Hollywood actors. The stock would also be 10% lower if they didn’t make these two non-factor announcements in the past 2 days.
As Apple and Amazon further their penetration into live sports, the gap between high quality content is enlarging between NFLX and the big boys.
Stay away from NFLX and drop your subscription.
Here are the specific trades you need to exit this position:
Sell to Close 24 September 2022 (NFLX) $252.50 put at……….…$32.45
Buy to Close 24 September 2022 (NFLX) $247.50 put at………….$27.80
Net Proceeds:……………………..…….………...........................…….....$4.65
Profit: $4.65 - $4.05 = $.60
(24 X 100 X $.60) = $1,440 or 14.81%
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.