Trade Alert - (ABNB) May 10, 2024

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) June 2024 $130-$135 in-the-money vertical BULL CALL spread at $4.20

Opening Trade

5-10-2024

expiration date: June 21, 2024

Portfolio weighting: 10%

Number of Contracts = 24 contracts

The bad news is in the share price for Airbnb (ABNB) and I believe we will see a bounce here in the short term.

This is a trade where I believe that ABNB share will stay above $135 in the next 42 days.

There is a chance we will be off to the races in tech after all the bad news from earnings season is digested.

Earnings weren’t great, many tech firms stumbled, but the ones who needed to perform did and good tech firms will get a pass for now.

The tech firms in the doldrums – I would stay away from them like the black plague.

ABNB made $5 billion in profits last year and has a great business model.

The pullback has delivered a good entry point.

Don’t pay more than $4.30.

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

Buy to Open 24 June 2024 (ABNB) $130 calls at………….………$17.50

Sell to short 24 June 2024 (ABNB) 135 calls at…...........……….$13.30

Net Cost:……………………..…….………..……..................................$4.20

Potential Profit: $5 - $4.20 = $0.80

(24 X 100 X $0.80) = $1,920 or 19.05% in 42 days

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 at
https://www.madhedgefundtrader.com/ltt-vbpds/

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.

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.