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.
Trade Alert - (QQQ) - BUY
BUY the Invesco QQQ Trust NASDAQ ETF (QQQ) January 2023 $290-$300 in-the-money vertical BEAR PUT spread at $9.10 or best
Opening Second Trade
12-19-2022
expiration date: January 20, 2023
Portfolio weighting: increase from 10% to 20%
Number of Contracts = 12 contracts
I think we are in for a market correction in January and that technology will lead on the downside.
Tech stocks now have the kiss of death on them and are still expensive relative to the S&P 500 (SPY). That makes them a great short.
Technology will eventually recover in the second half of the year but will have to test lower lows first.
The (QQQ) is the favorite proxy for tech stocks. Its five largest holdings are Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), NVIDIA (NVDA), and Alphabet (GOOG). To learn more about the (QQQ), please click here.
By taking on options put trade now, you get the benefit of low volatility and time decay over the extended holiday period. There is no point in passing up a sweet trade just because some guy with a white beard in a red suit is about the descend down the chimney.
And let me tell you, starting out the New Year with a big profit in your trading account is the way to go. It lets you trade from a position of strength for the rest of the year.
I don’t see any upside surprises on the horizon that could upset this position. Q4 earnings are about to be released and the sense of foreboding to palpable. We also get an assist from the 200-day moving average, which should provide major upside resistance.
I am therefore buying the Invesco QQQ Trust NASDAQ ETF (QQQ) January 2023 $290-$300 in-the-money vertical BEAR PUT spread at $9.10 or best.
Don’t pay more than $9.40 or you’ll be chasing.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
This is a bet that the Invesco QQQ Trust NASDAQ ETF S&P 500 (QQQ) will not trade above $290.00 by the January 20 option expiration day in 19 trading days. If the market gets that high in 19 days, you will think you have died and gone to heaven.
If you don’t do options, stand aside. This is a very short-term options expiration play only.
Here are the specific trades you need to execute this position:
Buy 12 January 2023 (QQQ) $300 puts at………...….………$35.00
Sell short 12 January 2023 (QQQ) $290 puts at…...……….$25.90
Net Cost:………………………...........….………..……………..….....$9.10
Potential Profit: $10.00 - $9.10 = $0.90
(12 X 100 X $0.90) = $1,080 or 9.89% in 19 trading days.
If you are uncertain about 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.
