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) – STOP LOSS
SELL Texas Instruments Incorporated (TXN) February 2022 $160 - $165 in-the-money vertical BULL CALL spread at $4.20
Closing Trade
2-4-2022
expiration date: February 18, 2022
Portfolio weighting: 10%
Number of Contracts = 23 contracts
I am cutting this trade short as Texas Instruments (TXN) appears to be a victim of geopolitical saber-rattling by China.
The Beijing Olympics is getting underway and it’s time to take a modest loss on this one because the price action in the last two days has been awful with shares down around 10%. Today is extremely worrying with the Nasdaq up but TXN down 4%.
Better to take a small loss while the share price is still above our upper strike price.
Here are the specific trades you need to exit this position:
Sell to Close 23 February 2022 (TXN) $160 calls at………….………$10.65
Buy to Close 23 February 2022 (TXN) $165 calls at………..........….$6.45
Net Proceeds:…………………..........................…..…….………..…….....$4.20
Loss: $4.30 - $4.20 = $.10
(23 X 100 X $.10) = $230 or 2.32%
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.
