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 - Palo Alto Networks, Inc. (PANW) – SELL STOP LOSS
SELL STOP LOSS Palo Alto Networks, Inc. (PANW) April 2024 $260-$270 in-the-money vertical BULL CALL spread at $5.65
Closing Trade
3-14-2024
expiration date: April 19, 2024
Portfolio weighting: 10%
Number of Contracts = 13 contracts
An intra-day reversal of 5% in PANW has wiped our position out and we will cut losses here.
PANW has struggled mightily and hovered in the $275 range while underperforming the greater tech market.
The price action has been poor and it is clear that investors are taking profits in PANW.
This position is my first real loss of the year.
It is time to deploy our capital into higher quality trades.
Here are the specific trades you need to exit this position:
Sell to Close 12 April 2024 (PANW) $260 calls at………….………$11.25
Buy to Close 12 April 2024 (PANW) $270 calls at……............….$5.60
Net Proceeds:……………………..…….…......................……..…….....$5.65
Loss: $7.70-5.65 = $2.05
(13 X 100 X $2.05) = $2,665 or 26.62%
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.
