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 - Rivian Automotive, Inc. (RIVN) – BUY
BUY the Rivian Automotive, Inc. (RIVN) June 2022 $35-$40 in-the-money vertical BEAR PUT spread at $4.30
Opening Trade
5-12-2022
expiration date: June 17, 2022
Portfolio weighting: 10%
Number of Contracts = 23 contracts
This is a tactical trade in EV automobile maker Rivian Automotive, Inc. (RIVN) will not rise above $35 in the next 36 days.
RIVN announced first quarter earnings and it bounced more than 20% because RIVN revealed it will build a mid-size SUV in 2025.
Honestly, that doesn’t help much with today’s treacherous trading climate and I’ll use the high volatility to put on a short position in RIVN.
RIVN has no earnings and the supply chain is in chaos, and those are the type of stocks most exposed in today’s climate.
It’s more likely there will be bad news in the pipeline like production delays and lithium battery shortages. Making a car in 2025 doesn’t move the needle much for today and the stock has been performing awfully.
I’ll bet that it goes back down from this pop.
Traders can roll down strike prices for more aggressive trading. Nobody in their right mind should be considering tech growth stocks right now. They are toxic.
Here are the specific trades you need to execute this position:
Buy 23 June 2022 (RIVN) $40 puts at………….………$15.50
Sell short 23 June 2022 (RIVN) $35 puts at………….$11.20
Net Cost:……………………..….............….………..…….....$4.30
Potential Profit: $5 - $4.30 = $.70
(23 X 100 X $.70) = $1,610 or 16.28% in 36 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.
