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) April 2022 $75-80 in-the-money vertical BEAR PUT spread at $3.80
Opening Trade
3-24-2022
expiration date: April 14, 2022
Portfolio weighting: 10%
Number of Contracts = 26 contracts
This is a tactical trade in remote medical services Teladoc (TDOC).
We took profits on a bear put spread the last two months on TDOC after the omicron virus peaked in the short-term meaning that no incremental investor would be interested in buying TDOC in the short-term.
A massive short-covering rally in the Nasdaq index has offered a brilliant entry point into yet another short-term bearish trade on uber-tech growth stock TDOC.
I can’t pass this one up and will go back to the well again as I believe the economic backdrop is overwhelmingly poor for high-growth tech.
Although, Apple rebounding 20% from the dip is quite impressive and broad-based healing was experienced in tech, I just don’t think there is another heave up in price action for TDOC in the next 21 days.
This bear put spread option trade is a short-term wager that TDOC will not rise above $75 in the next 21 days.
Here are the specific trades you need to execute this position:
Buy 26 April 2022 (TDOC) $80 puts at………….………$13.60
Sell short 26 April 2022 (TDOC) $75 puts at……….….$9.80
Net Cost:……………………..…….………..……..................$3.80
Potential Profit: $5 - $3.80 = $1.20
(26 X 100 X $1.20) = $3,120 or 31.58% in 21 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.
