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 - Shopify Inc. (SHOP) – BUY
BUY the Shopify Inc. (SHOP) June 2022 $395-405 in-the-money vertical BEAR PUT spread at $8.40
Opening Trade
6-6-2022
expiration date: June 17, 2022
Portfolio weighting: 10%
Number of Contracts = 13 contracts
This is a short-term tactical trade in Shopify Inc. (SHOP) that SHOP won’t rise above $395 in the next 11 days.
$400 has served as short-term resistance in SHOP as the stock surged to those levels 4 times in the past month only to fall back down to the mid-$300 levels.
The Nasdaq has had a nice bear market rally and I still have 2 bullish positions open in Tesla and Nvidia.
This would be a good hedge for those positions along with the accelerated time decay we are accruing with the short time to expiration.
In the next 11 days, this is a bet that we won’t see great underlying data from the American digital consumer.
This is a terrible long-term holding environment in tech unless you have a 10-year horizon.
Short-term traders should take a look at shorting SHOP for the next 11 days.
Here are the specific trades you need to execute this position:
Buy 13 June 2022 (SHOP) $405 puts at………….………$51.50
Sell short 13 June 2022 (SHOP) $395 puts at………….$43.10
Net Cost:……………………................…….………..….….....$8.40
Potential Profit: $10 - $8.40 = $1.60
(13 X 100 X $2.60) = $2,080 or 19.05% in 11 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.
