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 - Teladoc Health, Inc. (TDOC) – BUY
BUY Teladoc Health, Inc. (TDOC) February 2022 $90-95 in-the-money vertical BEAR PUT spread at $4.23
Opening Trade
1-19-2022
expiration date: February 18, 2022
Portfolio weighting: 10%
Number of Contracts = 23 contracts
This is a tactical trade in remote medical services. If the omicron virus has peaked in the short term, why would the incremental patient need Teladoc?
If there is a reversal into “re-opening” assets then obviously, TDOC isn’t going to be one of the benefactors.
Technically, the charts look terrible on this one. I feel this one has a ways to go until it hits a bottom and in a rising rate environment, this is the ugly red-headed stepchild you wish you didn’t have.
Personally, not a fan of ARKK CEO Cathie Woods who has no idea about market timing and whose fund is down 51% since the peak.
Readers should avoid all growth tech right now and only consider tech companies with strong balance sheets like MSFT.
Don’t buy this stock – if anything, sell the rallies like we are doing here.
This bear put spread option trade is a short-term wager that TDOC will not rise above $90 in the next 30 days.
Here are the specific trades you need to execute this position:
Buy 25 February 2022 (TDOC) $95 puts at………….………$18.60
Sell short 25 February 2022 (TDOC) $90 puts at………….$14.37
Net Cost:…………………….......................…….………..…….....$4.23
Potential Profit: $5 - $4.23 = $.77
(23 X 100 X $.77) = $1,771 or 18.20% in 30 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.
