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 - Texas Instruments Incorporated (TXN) – BUY
BUY Texas Instruments Incorporated (TXN) February 2022 $160 - $165 in-the-money vertical BULL CALL spread at $4.30
Opening Trade
2-1-2022
expiration date: February 18, 2022
Portfolio weighting: 10%
Number of Contracts = 23 contracts
The Semiconductor ETF (SMH) has had a nice bounce and I believe it’s time to get into the strongest semi manufacturing names in the semi business like Applied Materials (AMAT) and Texas Instruments (TXN).
These companies are really the gold standard of chip manufacturing services and highly profitable, at a time when every tech company is clamoring for more chips including China, and I will hide out in strong balance sheets until the trading environment becomes more favorable to riskier companies.
Although I expect this market selloff to continue for weeks, if not months, the biggest declines are behind us. When markets bottom out, the big money will pour back into the best quality names, especially TXN
I am therefore buying the Texas Instruments (TXN) February 2022 $160-$165 in-the-money vertical Bull Call spread
Here are the specific trades you need to execute this position:
Buy 23 February 2022 (TXN) $160 calls at………….………$18.80
Sell short 23 February 2022 (TXN) $165 calls at………….$14.50
Net Cost:…………………….....................….….………..…….....$4.30
Potential Profit: $5 - $4.30 = $.70
(23 X 100 X $.70) = $1,610 or 16.28% 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.
