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 - NVIDIA Corporation (NVDA) – STOP LOSS
SELL NVIDIA Corporation (NVDA) June 2022 $162.50 - $172.50 in-the-money vertical BULL CALL spread at $6.40
Closing Trade
6-10-2022
expiration date: June 17, 2022
Portfolio weighting: 10%
Number of Contracts = 12 contracts
This was a 15-day trade that NVDA wouldn’t tank and the inflation number this morning had crushed tech stocks and we are going to sell our position.
Effectively, the rate hike expectations accelerate, path to lower rates/low inflation narrows, and recession risk is pulled forward.
Techs are a sell on the rally.
I thought the bear rally would get us over the line to the 17th but it's bombs away today.
Additionally, we only started to perform quantitative tightening a week ago which amounted to a paltry sum of around $75 million. Imagine how the tech market will fare if they finally get that moving.
Here are the specific trades you need to exit this position:
Sell to Close 12 June 2022 (NVDA) $162.50 calls at………….………$12.90
Buy to Close 12 June 2022 (NVDA) $172.50 calls at……..........…….$6.50
Net Proceeds:……………………..…….…..........................……..…….....$6.40
Loss: $8.55-$6.40= $2.15
(12 X 100 X $2.15) = $2,580 or 25.15%
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.
