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 - Twilio Inc. (TWLO) – SELL TAKE PROFITS
SELL TAKE PROFITS Twilio Inc. (TWLO) November 2021 $250-$260 in-the-money vertical BULL call spread at $9.97
Closing Trade
11-15-2021
expiration date: November 19, 2021
Portfolio weighting: 10%
Number of Contracts = 11 contracts
This was a short-term bet Twilio Inc. (TWLO) would stay above $260 by November 19th.
After trending down to the $280 level, TWLO responded by shooting over $300 and staying there for the past 10 days giving us a green light to take profits today.
Well done and on to the next tech trade.
How did we get an entry point into TWLO?
(TWLO) was trading around 15% lower after the company announced its third-quarter financial results and issued guidance below estimates.
Twilio reported quarterly adjusted earnings of 1 cent per share, which beat the estimate for a loss of 14 cents per share. The company reported quarterly revenue of $740.2 million, which beat the estimate of $680.52 million.
I saw this not as a structural problem and in fact, just a neat pullback to buy into and I nailed it 100%.
What exactly does TWLO do?
Twilio Messaging is an API to send and receive SMS, MMS, OTT messages globally. It uses intelligent sending features to ensure messages reliably reach end-users wherever they are. Twilio Programmable Voice lets you make, manage, and route calls to a browser, an app, your phone, or anywhere else you can take a call.
If you don’t do options, avoid for now because growth could be on the chopping block with external signals upcoming internet rate yields going higher.
Here are the specific trades you need to exit this position:
Sell to Close 11 November 2021 (TWLO) $250 calls …….………$53.88
Buy to Close 11 November 2021 (TWLO) $260 calls at………….$43.91
Net Proceeds:……………………........................…….………..…….....$9.97
Profit: $9.97 - $8.60 = $1.37
(11 X 100 X $1.37) = $1,507 or 15.93%
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.
