Trade Alert - (ADBE) February 27, 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 - Adobe Inc. (ADBE) – BUY

Buy Adobe Inc. (ADBE) March 2024 $490-$495 in-the-money vertical BULL CALL spread at $4.20

Opening Trade

2-27-2024

expiration date: March 15, 2024

Portfolio weighting: 10%

Number of Contracts = 24 contracts

Adobe (ADBE) shares have pulled back after high-profile artificial intelligence startup OpenAI introduced a new text-to-video generator. ADBE stock plunged more than 7% on the news.

ADBE is still a great company and I am buying it on the dip for a short-term trade.

San Francisco-based OpenAI introduced Sora, which can create lifelike videos from simple text descriptions. Earlier OpenAI services can create written articles and images from basic prompts.

Sora is able to generate complex video scenes with multiple characters, specific types of motion, and accurate details of the subject and background, the company said. It currently can generate videos up to a minute long. But Sora is still in testing and not yet available for public use.

Don’t pay more than $4.30.

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

Buy to Open 24 March 2024 (ADBE) $490 calls at………….………$65.15

Sell to short 24 March 2024 (ADBE) 495 calls at………...........….$60.95

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

Potential Profit: $5 - $4.20 = $0.80

(24 X 100 X $0.80) = $1,920 or 19.05% in 17 days

If you are uncertain about 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.

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.