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) – BUY
Buy Palo Alto Networks, Inc. (PANW) December 2023 $210-$220 in-the-money vertical BULL CALL spread at $9.00
Opening Trade
11-16-2023
expiration date: December 15, 2023
Portfolio weighting: 10%
Number of Contracts = 11 contracts
This is a 29-day mildly bullish trade that PANW’s underlying stocks will stay above $220 by December expiration.
PANW beat on the top line but forecasts came in less than expected triggering a 6% selloff.
Second quarter billings guidance of $2.34 billion-$2.39 billion fell short of the $2.43 billion estimate.
I am going to use this sell-off to put money to work in PANW.
This is a short-term tactical bet on PANW and I believe this is a good stock to hold long-term because it’s the best of breed in the cyber security sector.
Don’t pay more than $9.10.
Here are the specific trades you need to execute this position:
Buy 11 December 2023 (PANW) $210 calls at………….………$32.40
Sell short 11 December 2023 (PANW) $220 calls at………….$23.40
Net Cost:……………………..…….………..…….....$9.00
Potential Profit: $10 - $9 = $1
(11 X 100 X $1) = $1,100 or 11.11% in 29 days
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.
