Trade Alert - (GOOGL) April 9, 2018 BUY
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.
Trade Alert - (GOOGL) - BUY
BUY the Alphabet (GOOGL) June, 2018 $900-$950 in-the-money vertical bull call spread at $41.00 or best
Opening Trade
4-9-2018
expiration date: June 15, 2018
Portfolio weighting: 10%
Number of Contracts = 3 contracts
The bottom in Google is looking pretty solid here so I am going to double up my position in the premier company in technology.
Online advertising is a duopoly, with Facebook (FB) and Alphabet (GOOGL) controlling most of the market.
(FB) is the errant company here, inadvertently leaking subscribers to hackers with nefarious goals, and its stock has dropped 30% from its high.
(GOOGL) hasn?t, but its shares have lost 16.6% in the current selloff. I therefore want to buy Alphabet.
So, I am buying the Alphabet (GOOGL) June, 2018 $900-$950 in-the-money vertical bull call spread at $41.00 or best.
The price for (GOOGL) has fallen to bargain basement levels, which are at 10 times EBITDA are trading more cheaply than at any time since the 2009 financial crisis.
It is trading this low, despite the fact that it has remained out of the firing line that are knocking down other big tech stocks, like Amazon (AMZN), Facebook (FB), and Tesla (TSLA).
For those who don?t know, EBITDA stands for ?earnings before interest, taxes, depreciation, and amortization?, or earnings before all the accounting gimmicks kick in.
And it trading at such a bargain a mere 21 days before a blockbuster Q1 earnings report on April 26, 2018.
This is a bet that the (GOOGL) will not trade below $950 at the June 15 expiration date in 50 trading days.
Don?t pay more than $45.00 for this position or you?ll be chasing.
If you don?t do options buy the stock outright, which could double from here over the long term.
Here are the specific trades you need to execute this position:
Buy 3 June 2018 (GOOGL) $900 calls at??.???$157.00
Sell short 3 June 2018 (GOOGL) $950 calls at???.$116.00
Net Cost:??????????.????..??.?.....$41.00
Potential Profit: $50.00 - $41.00 = $9.00
(3 X 100 X $9.00) = $2,700 or 21.95% in 50 trading days.
To see how to enter this trade in your online platform, please look at the order ticket above, 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 Vertical Call and Put Debit Spreads by clicking here.
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Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
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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 close to expiration.
If you don't get done, don't worry. There are another 250 Trade Alerts coming at you over the coming 12 months.