Trade Alert - (ABNB) August 25, 2023

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 - Airbnb, Inc. (ABNB) – BUY

Buy Airbnb, Inc. (ABNB) September 2023 $132-$137 in-the-money vertical BEAR PUT spread at $4.15

Opening Trade

8-25-2023

expiration date: September 15, 2023

Portfolio weighting: 10%

Number of Contracts = 24 contracts

The pendulum has swung to the other end after contagion has rocked the tech markets.

After a consolidation period, Fed Chair Jerome Powell could have steadied the tech market by signaling to go easy on rates but he did the opposite.

Expect higher rates as Powell emphasized goods inflation still needs to come down.

This could mean that the U.S. 10-year Treasury goes to 4.50% which is highly negative for the short-term price action of tech stocks.

Summer season is over and I will play this by shorting travel tech platform Airbnb.

Don’t pay more than $4.22.

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

Buy to Open 25 September 2023 (ABNB) $137 puts at………….………$12.80

Sell to short 25 September 2023 (ABNB) 132 puts at……............…….$8.65

Net Cost:……………………........................................…….………..…….....$4.15

Potential Profit: $5 - $4.15 = $.85

(24 X 100 X $0.85) = $2,040 or 20.48% in 21 days

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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