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 - (PYPL) – BUY
BUY the PayPal Holdings, Inc. (PYPL) August 2019 $100-$105 in-the-money vertical BULL CALL spread at $4.43 up to $4.60
Opening Trade
7-30-2019
expiration date: August 16, 2019
Portfolio weighting: 10%
Number of Contracts = 22 contracts
Shares of PayPal Holdings Inc. (PYPL) have been down the past few days after Guggenheim's Jeff Cantwell downgraded the stock to sell from neutral, setting a $104 target price.
"We believe shares of PayPal will begin underperforming as investors increasingly contemplate 2020," he wrote.
I still think this is a great company and time to trade it short term.
Don’t pay more than $4.60.
Here are the specific trades you need to execute this position:
Buy 22 August 2019 (PYPL) $100 calls at………….………$10.25
Sell short 22 August 2019 (PYPL) $105 calls at…….…….$5.82
Net Cost:………………………..…….…...............……..…….....$4.43
Potential Profit: $5.00 - $4.43 = $0.57
(22 X 100 X $0.57) = $1,254 or 12.54% in 14 trading days.
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.