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 - Spotify Technology S.A. (SPOT) – BUY
Buy Spotify Technology S.A. (SPOT) August 2023 $136-$141 in-the-money vertical BULL CALL spread at $4.25
Opening Trade
8-1-2023
expiration date: August 18, 2023
Portfolio weighting: 10%
Number of Contracts = 23 contracts
The music streaming platform Spotify (SPOT) sold off on a worse-than-expected earnings report and I am here to buy the dip.
Shares sold off 14% a few days ago and I believe we are getting a tradable short-term bottom.
They grew users by 27% year over year which is why I believe there will be interest by the dip buyers.
The company now has over 551 million monthly users.
Aggressive traders can move up the upper strike price to $143 which should give an even cheaper cost basis.
Don’t pay more than $4.38.
Here are the specific trades you need to execute this position:
Buy to Open 23 August 2023 (SPOT) $136 calls at………….………$16.50
Sell to short 23 August 2023 (SPOT) 141 calls at………............….$12.25
Net Cost:……………………..…….………..…................................….....$4.25
Potential Profit: $5 - $4.25 = $.75
(23 X 100 X $.75) = $1,725 or 17.61% in 17 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.
