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 - Roku, Inc. (ROKU) – SELL – STOP LOSS
SELL – STOP LOSS Roku, Inc. (ROKU) August 2021 $355 - $360 in-the-money vertical BULL call spread at $3.50
Closing Trade
8-11-2021
expiration date: August 20, 2021
Portfolio weighting: 10%
Number of Contracts = 23 contracts
This was a short-term bet that Roku, Inc. (ROKU) would stay above $360 by August 20th expiration and the price action has been highly disappointing.
We have seen heavy selling pressure after we executed this position and now, I will cut my losses.
The rotation has been unkind to ROKU and I do believe it’s a great long-term buy and hold but this stock is highly volatile and poor sessions of big down days are sometimes in the cards for this stock.
I would hold onto this stock if you have a long-term time horizon. For traders, we don’t have that luxury.
Here are the specific trades you need to exit this position:
Sell to Close 23 August 2021 (ROKU) $355 calls at………….………$20.00
Buy to Close 23 August 2021 (ROKU) $360 calls at….........……….$16.50
Net Proceeds:…………...........................…………..…….……...…….....$3.50
Loss: $4.30 - $3.50 = $.80
(23 X 100 X $.80) = $1,840 or 18.60%
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 at
http://www.madhedgefundtrader.com/ltt-vbpds/
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.
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.
