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 - Workday, Inc. (WDAY) – SELL – STOP LOSS
SELL the Workday, Inc. (WDAY) August 2019 $180-$185 vertical BULL CALL spread at $3.40 or best
Closing Trade
8-14-2019
expiration date: August 16, 2019
Portfolio weighting: 10%
Number of Contracts = 22 contracts
This was a very short-dated bet on Workday staying above $185 until Friday’s close.
Workday, Inc. provides enterprise cloud applications worldwide. Its applications help its customers to manage critical business functions and optimize their financial and human capital resources.
A stable stock with little beta would be able to handle the short time pressure but not when the yield curve inverts and brings about the mother of risk off moves and Workday’s 200-day moving average gets smashed to bits.
Workday is down 4% today which is an anomaly.
I am bearish tech in general but even a large cushion wasn’t enough for the stock to hold our upper strike price.
Tech is volatile now and the days of easy money in Silicon Valley are over with balance sheets examined with the fine comb now.
The semi strength I talked about yesterday lasted all of 1 day which epitomizes the market environment now.
The NASDAQ is down 3% today and most traders are hunkering down.
Better to play from the short side and the semi strength I called for yesterday only lasted for a day as the global slowdown goes into free fall.
This is still a good company, long term investors should hold it.
Here are the specific trades you need to execute this position:
Sell 22 August 2019 (WDAY) $180 call at………….…............……$6.20
Buy to Cover short 22 August 2019 (WDAY) $185 call at……….$2.80
Net Proceeds:…………….....................………..…….………..…….....$3.40
Loss: $4.30 - $3.40 = -$0.90
(22 X 100 X -$0.90) = -$1,980 or -19.80%
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.
