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) – SELL – TAKE PROFITS
SELL Pinterest, Inc. (PINS) October 2022 $17.50-$20.50 in-the-money vertical BULL CALL spread at $2.85
Closing Trade
10-4-2022
expiration date: October 21, 2022
Portfolio weighting: 10%
Number of Contracts = 42 contracts
This was a trade betting that Pinterest (PINS) would stay above $20.50 in 23 days.
I’m exiting the position taking 75% of the possible profit and I’m satisfied right here closing it as the bad news is good news narrative pushes intraday trading crushing the bears.
The broader Nasdaq is up over 3% and I imagine short-term traders are taking profits.
By no means are we out of this kerfuffle.
Inflation is still the biggest risk to the tech market and just because a famous Swiss bank is having credit problems doesn’t exactly mean that the Fed is willing to pivot because of this.
The risk/reward for a bear-market rally in the short-term was favorable, therefore, I executed a bullish position in PINS and we are making out with a comfortable profit.
We now hold just one bullish position in Apple.
Here are the specific trades you need to exit this position:
Sell to Close 42 October 2022 (PINS) $17.50 calls at……………$7.25
Buy to Close 42 October 2022 (PINS) $20.50 calls at………….$4.40
Net Proceeds:………………….................…..…….………..……......$2.85
Profit: $2.85 - $2.40 = $.45
(42 X 100 X $.45) = $1,890 or 18.75%
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.
