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 Trade Alert - (STX) – BUY
BUY Seagate Technology plc (STX) September 2019 $50-$55 in-the-money vertical BEAR PUT spread at $4.50 up to $4.60
Opening Trade
8-19-2019
expiration date: September 20, 2019
Portfolio weighting: 10%
Number of Contracts = 22 contracts
Seagate Technology is a legacy tech company that each time gets a bump in shares because they are doing less worse than previously thought.
Seagate Technology PLC shares fell on last earnings report because the maker of hard disk drives and storage products said revenue fell in its fiscal fourth quarter and offered soft profit guidance.
Labels like “deep value” are not what I want to hear at this stage in the economic cycle.
The company hasn’t grown revenue in years and the global slowdown won’t help them overcome softness and the weak guidance confirmed that.
I’m going to use this up day to execute a deep in the money put spread on Seagate Technology.
Here are the specific trades you need to execute this position:
Buy 22 September 2019 (STX) $55 put at………….………$8.05
Sell short 22 September 2019 (STX) $50 put at………….$3.55
Net Cost:……………………..…….….................……..…….....$4.50
Potential Profit: $5.00 - $4.50 = $0.50
(22 X 100 X $0.50) = $1,100 or 11% in 33 days.
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video on “How to Execute a Vertical Bull Call Spread” by clicking here at
http://www.madhedgefundtrader.com/ltt-vbpds/
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.
