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 - Pinterest, Inc. (PINS) – TAKE PROFITS
SELL Pinterest, Inc. (PINS) October 2021 $55-$58 in-the-money vertical Bear Put spread at $2.95
Closing Trade
10-11-2021
expiration date: October 15, 2021
Portfolio weighting: 10%
Number of Contracts = 39 contracts
This was a short-term trade that social media platform Pinterest, Inc. (PINS) would stay BELOW the strike price of $55 and we are taking profits on it because the risk/reward for staying in this trade until expiration is not favorable.
This has been a nice go-to trade as traders are not highly convinced on PINS when they are growing less and less under a backdrop that is highly hostile to social media.
This is supposed to be a growth company, but it doesn’t grow.
What do the numbers look like?
PINS monthly active users fell by 5% in the U.S. in the second quarter, and management guided for revenue growth in the low 40% range for the year. That represented a drop from the 58% growth from the third quarter of 2020.
The latest performance is akin to crossing red lines in growth technology and it is time to bully on the weak.
Readers shouldn’t be holding PINS stock whatsoever, migrate to higher ground.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
If you don’t do options, stand aside.
Here are the specific trades you need to exit this position:
Sell to Close 39 October 2021 (PINS) $58 puts at………….………$6.40
Buy to Close 39 October 2021 (PINS) $55 puts at……….........….$3.45
Net Proceeds:……………………..…….……….......................…….....$2.95
Profit: $2.95 - $2.50 = $.45
(39 X 100 X $.45) = $1,755 or 18.00%
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.
