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) – BUY
BUY the Workday, Inc. (WDAY) August 2019 $180-$185 in-the-money vertical BULL CALL spread at $4.30 up to $4.50
Opening Trade
8-9-2019
expiration date: August 16, 2019
Portfolio weighting: 10%
Number of Contracts = 22 contracts
This is a very short-dated bet on Workday staying above $185 until next 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.
It’s the best “HR cloud stock” on the market and revenue is insulated from the trade war fallout.
The last week has been a brutal trading week and the best place to hide out is in high quality cloud names.
Even then, it’s been a tough go at it, but implied volatility has been high giving traders advantageous prices.
It’s not always like this.
Here are the specific trades you need to execute this position:
Buy 22 August 2019 (WDAY) $180 calls at………….………$13.15
Sell short 22 August 2019 (WDAY) $185 calls at….……….$8.85
Net Cost:……………………..…….………..…….........................$4.30
Potential Profit: $5.00 - $4.30 = $0.70
(22 X 100 X $0.70) = $1,540 or 15.40%
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.
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.
