Trade Alert - (ZM) May 11, 2023 - TAKE PROFITS

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 – Zoom Video Communications, Inc. (ZM) – TAKE PROFITS

SELL TAKE PROFITS Zoom Video Communications, Inc. (ZM) May 2023 $66-$71 in-the-money vertical BEAR PUT spread at $4.35

Closing Trade

5-11-2023

expiration date: May 19, 2023

Portfolio weighting: 10%

Number of Contracts = 23 contracts

I executed a bearish trade that underlying shares of video conferencing company Zoom (ZM) would stay below $66 in the next 17 days.

This was my 3^rd and last position against ZM.

Surprisingly, the stock has ground higher since we put this trade on and our lower strike is threatened. We are still enough in the money to take a modest profit and that is what we will do.

ZM was even up over 2% yesterday on no news which is a red flag.

It could be that the stock is so beaten down there is a dead cat bounce.

On a day when regional bank contagion rears its ugly head, volatility is minimal.

I wouldn’t recommend readers invest in ZM for the long term – this was just a trade.

I recommend readers entering back on the long side to the 7 too big to fail tech stocks.

Here are the specific trades you need to exit this position:

Sell to Close 23 May 2023 (ZM) $71 puts at..…...……$6.90

Buy to Close 23 May 2023 (ZM) $66 puts at………….$2.55

Net Proceeds:……………………..…….…....……..…….....$4.35

Profit: $4.35- $4.25 = $.10

(23 X 100 X $.10) = $230 or 2.35%

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.

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