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) – BUY
BUY Pinterest, Inc. (PINS) October 2021 $55-$58 in-the-money vertical Bear Put spread at $2.50
Opening Trade
9-29-2021
expiration date: October 15, 2021
Portfolio weighting: 10%
Number of Contracts = 39 contracts
This is a short-term trade that social media platform Pinterest, Inc. (PINS) will stay BELOW the strike price of $55 in the next 16 days.
I took profits on a bearish trade in PINS last month, and I believe the same conditions are there to go to the well again for October expiration.
Just recently, PINS has experienced a bevy of downgrades because of poor third-quarter guidance as a result of shoppers shifting their attention back to physical spaces.
What’s so bad about PINS?
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 execute this position:
Buy to Open 39 October 2021 (PINS) $58 puts at………….………$6.40
Sell to Open 39 October 2021 (PINS) $55 puts at……….........….$3.90
Net Cost:…………………….............................…….……..…..…….....$2.50
Potential Profit: $3 - $2.50 = $.50
(39 X 100 X $.50) = $1,950 or 20.00% in 16 days
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.
