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 Trade Alert - (PANW) – SELL – TAKE PROFITS
Sell the Palo Alto Networks, Inc. (PANW) September 2019 $170-$175 in-the-money vertical BULL CALL spread at $5 or best
Closing Trade – Not For New Subscribers
9-5-2019
expiration date: September 20, 2019
Portfolio weighting: 10%
Number of Contracts = 26 contracts
Palo Alto Networks, Inc. (PANW) came out with earnings after the bell yesterday and beat estimates on the top and bottom line causing a massive rush up this morning in shares.
The stock opened up the trading session more than 8% from yesterday’s closing price.
Our call spread is now at its maximum price and this might take 2 cents to get it done, or you could wait until expiration in 15 days to pocket the full $5 minus execution fees.
Revenue growth north of 20% is not bad considering we are on the verge of a global recession.
Palo Alto Networks, Inc. provides security platform solutions worldwide. The company provides firewall appliances and software; Panorama, a security management solution for the control of appliances deployed on an end-customer's network as a virtual or a physical appliance.
Initially, I missed an entry point when (PANW) dipped amid a report that another top executive is leaving the cybersecurity firm. Palo Alto stock slipped after The Information reported that David Peranich, executive vice president of worldwide sales, is exiting the company.
Peranich has been with Palo Alto for three years. Palo Alto stock fell 7.2% to close at 199.25 that day and has since recovered a little.
Chief Executive Nikesh Arora, a former top executive at Alphabet unit Google (GOOGL), took the cybersecurity firm's helm in June 2018. Several management changes followed last year. Chief Marketing Officer Rene Bonvanie left in July to manage a chronic illness, the company said.
In 2017, Palo Alto Networks chief financial officer as well as its head of sales in the Americas departed.
Sell 26 September 2019 (PANW) $170 calls at………….………$116.10
Buy to cover short 26 September 2019 (PANW) $175 calls at………….$111.10
Net Proceeds:……………...........…………….………..………….….....$5.00
Profit: $5.00 - $3.83 = $1.17
(26 X 100 X $1.17) = $3,042 or 30.42%
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video on “How to Execute a Vertical Bull Call Spread” 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.
