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 - Oracle Corporation (ORCL) – STOP LOSS
SELL Oracle Corporation (ORCL) December 2023 $100-$105 in-the-money vertical BULL CALL spread at $3.50
Closing Trade
12-12-2023
expiration date: December 15, 2023
Portfolio weighting: 10%
Number of Contracts = 22 contracts
Oracle gets crushed after the earnings report miss.
The implied move for the earnings report was 5.9% and being 9% in the money, it should have been enough to take profits this morning.
However, Oracle management totally blew the earnings call and the stock is down over 10% this morning and we are cutting losses before it gets out of hand.
This shows that not all AI stocks are created equally and even though ORCL performed well before the earnings report, even a 9% cushion evaporated in a blink of an eye.
This goes to show that tech in the short term doesn’t always go up even though the sector has performed well in 2023.
Here are the specific trades you need to execute this position:
Sell to Close 22 December 2023 (ORCL) $100 calls at………….………$4.95
Buy to Close 22 December 2023 (ORCL) $105 calls at…….........…….$1.45
Net Proceeds:……………………..…............................….………..…….....$3.50
Loss: $4.40-$3.50 = $0.90
(22 X 100 X $0.90) = $1,980 or -20.45%
If you are uncertain about 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.