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 - Invesco QQQ Trust (QQQ) – BUY
BUY - Invesco QQQ Trust (QQQ) June 2021 $347-$352 in-the-money vertical BEAR put spread at $4.42
Opening Trade – FOR NEW SUBSCRIBERS
6-10-2021
expiration date: June 18, 2021
Portfolio weighting: 10%
Number of Contracts = 22 contracts
This is a short-term bet that Invesco QQQ Trust (QQQ) will stay BELOW $347 in the next 8 days which means that even if the underlying stock goes slightly up from the current price, we will still make a profit.
I said today that I am bullish on tech shares going into the summer and we appear to be in a “goldilocks” phase.
But, I don’t think QQQ which is a proxy for the Nasdaq-100 index will surge past $345 or $347 in the next 8 days. This is a very short-dated trade for the tech trading portfolio, and I will be out of these trades on the first surge down which I expect in the next 8 days.
We have already taken profits twice in QQQ put spreads in May and June expiration.
We also concurrently have a QQQ put spread with June expiration that will make profits if the underlying stock stays under $345, meaning we have 2 put spread on QQQ with different strike prices RIGHT NOW. We are just rolling up the strike prices with one.
I still love the cash cow of tech like Google, Apple, Microsoft, and Facebook, and we have taken profits on GOOGL, AMZN, CRM, PYPL, COIN in the past 3 weeks taking our portfolio a leg up.
I still love technology and they are the long-term difference makers in the economy, but the sector is in the process of being rerated.
If you don’t do options or short-term trader, avoid for now, but if you hold the ETF, keep it long-term.
Here are the specific trades you need to execute this position:
Buy 22 June 2021 (QQQ) $352 puts at………...………$12.52
Sell short 22 June 2021 (QQQ) $347 puts at………….$8.10
Net Cost:……………...........………..…….………...…….....$4.42
Potential Profit: $5 - $4.42 = $.58
(22 X 100 X $.58) = $1,276 or 13.12% in 8 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.
