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) – STOP LOSS
SELL the Invesco QQQ Trust NASDAQ ETF (QQQ) February 2023 $305-$315 in-the-money vertical BEAR PUT spread at $5.35 or best
Closing Trade
2-2-2023
expiration date: February 17, 2023
Portfolio weighting: increase from 10%
Number of Contracts = 12 contracts
Jay Powell was plenty negative in yesterday’s press conference. But people heard what they wanted to hear. With each negative comment, the market ticked down, eventually reaching a loss of 500 points.
In fact, they are all net short or underweight equities and were looking for excuses to BUY, far more short than I thought.
As much as I hate to sell this here, I have to maintain my rigid stop-loss discipline.
I am therefore selling the Invesco QQQ Trust NASDAQ ETF (QQQ) February 2023 $305-$315 in-the-money vertical BEAR PUT spread at $5.35 or best.
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
The (QQQ) is the favorite proxy for tech stocks. It’s five largest holding are Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), NVIDIA (NVDA), and Alphabet (GOOG). To learn more about the (QQQ), please click here.
This was a bet that the Invesco QQQ Trust NASDAQ ETF S&P 500 (QQQ) would not trade above $305.00 by the February 17 option expiration day in 19 trading days.
Here are the specific trades you need to close out this position:
Sell 12 February 2023 (QQQ) $315 puts at………....….………$10.00
Buy to cover short 12 February 2023 (QQQ) $305 puts at….$4.65
Net Proceeds:………………………….………..…………..........….....$5.35
Loss: $9.00 - $5.35 = $3.65
(12 X 100 X $3.65) = $4,380
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.
