Tech Alert - (ZM) October 5, 2023 - SELL

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 Zoom Video Communications, Inc. (ZM) May 2023 $74-$79 in-the-money vertical BEAR PUT spread at $4.95

Closing Trade

10-5-2023

expiration date: October 20, 2023

Portfolio weighting: 10%

Number of Contracts = 24 contracts

I executed a trade that underlying shares of video conferencing company Zoom (ZM) would stay below $74 in the next 18 days.

After a few days, I am taking profits as the stock has cratered along with the rest of small cap tech as recession fears set in.

Tech fundamentals are weakening so I don’t expect these small balance sheets to hold up in the face of high interest rates.

I was proved right and I am taking profits here and looking to deploy the profits in the next tech trade.

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

Sell to Close 24 October 2023 (ZM) $79 puts at………….………$13.70

Buy to Close 24 October 2023 (ZM) $74 puts at…..........……….$8.75

Net Proceeds:……………………..…..................….…..……..…….....$4.95

Profit: $4.95- $4.25 = $.70

(24 X 100 X $.70) = $1,680 or 16.48%

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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