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) - BUY
BUY Twilio Inc. (TWLO) November 2021 $250-$260 in-the-money vertical BULL call spread at $8.60
Opening Trade
10-28-2021
expiration date: November 19, 2021
Portfolio weighting: 10%
Number of Contracts = 11 contracts
This is a short-term bet Twilio Inc. (TWLO) will stay above $260 by November 19th.
(TWLO) is 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 see this now as a structural problem and just a neat pullback to buy into.
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 ar 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.
Here are the specific trades you need to execute this position:
Buy 11 November 2021 (TWLO) $250 calls at………….………$44.33
Sell short 11 November 2021 (TWLO) $260 calls at………….$35.73
Net Cost:…………......................…………..…….…..……..…….....$8.60
Potential Profit: $10 - $8.60 = $1.40
(11 X 100 X $1.40) = $1,540 or 16.28% in 22 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.
