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) November 2022 $15.00-$17.50 in-the-money vertical BULL CALL spread at $2.48
Closing Trade
10-18-2022
expiration date: November 18, 2022
Portfolio weighting: 10%
Number of Contracts = 50 contracts
This was a bullish trade in social media platform Pinterest, Inc. (PINS) with a 36-day time horizon and the underlying stock is now up around 9% since we executed this trade.
I am taking profits here harvesting 96% of the possible profit and waiting to deploy the capital into a new position. The risk/reward scenario of holding the position until maturity isn’t worth it.
There is now a 100% probability of a .75% Fed Funds rate hike at the next Fed meeting on November 2nd.
That means the expected rate rise is fully priced into tech shares which is why tech stocks have taken off.
PINS will be an interesting tech trade to execute on bear market rallies.
Here are the specific trades you need to execute this position:
Sell to Close 50 November 2022 (PINS) $15.00 calls at..…….…$8.30
Buy to Close 50 November 2022 (PINS) $17.50 calls at………….$5.82
Net Proceeds:……………………..…….……....................…..….….....$2.48
Profit: $2.48- $2 = $.48
(50 X 100 X $.48) = $2,250 or 22.50%
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.