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) – SELL – TAKE PROFITS
Sell Take Profits Teladoc Health, Inc. (TDOC) February 2022 $90-95 in-the-money vertical BEAR PUT spread at $4.80
Closing Trade
1-24-2022
expiration date: February 18, 2022
Portfolio weighting: 10%
Number of Contracts = 23 contracts
This was a tactical trade in remote medical services. If the omicron virus has peaked in the short-term, why would the incremental patient need Teladoc?
The stock has done nothing but head south as the macro environment has shown no let-up and investors are heading for the exits in droves.
We are massively oversold at this point and I believe taking profits in TDOC is the right thing to do.
Although we aren’t harvesting max profit, the risk-reward to holding until expiration is poor, the 74.03% of max profit earned is good enough to exit right here for us as we decide where next to deploy the gunpowder.
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.
Here are the specific trades you need to execute this position:
Sell to Close 23 February 2022 (TDOC) $95 puts at………….………$26.70
Buy to Close 23 February 2022 (TDOC) $90 puts at…….........…….$21.90
Net Proceeds:……………………..…….……...........................…..…….....$4.80
Profit: $4.80 - $4.23 = $.57
(23 X 100 X $.57) = $1,311 or 13.48%
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.
