Trade Alert - (ADBE) March 5, 2020 - 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.
Tech Alert - Adobe Inc. (ADBE) – BUY
BUY Adobe Inc. (ADBE) March 2020 $315-$320 in-the-money vertical BULL call spread at $4.15
Opening Trade
3-5-2020
expiration date: March 20, 2020
Portfolio weighting: 10%
Number of Contracts = 23 contracts
I rolled down my upper strike from $330 to $325 then $320 as Adobe shares cratered from $360 to $350 in less than 60 minutes along with the broader tech market.
On the flip side, the heightened implied volatility is giving us access to entry points that did not exist a month ago, but the daily moves are gut-wrenching to say the least.
Adobe is the best cloud stock connected with generating digital content and especially premium content.
Not only is the software operated at a professional level, but the company is pumping out 20%+ year over year growth each quarter.
This is a short-term bet that software company Adobe will stay above $320 by March 20.
I am only focusing on the strongest names in the tech sector for these short-term trades in an attempt to hide out from the chaos going on as the U.S. economy is battling a potential epidemic and emergency interest rate cuts.
Do not give up on technology because as Zoom Communications (ZM) showed us, the epidemic is bringing forward the future of business by forcing employers to go digital.
Accelerating the process will only help technology companies accrue more incremental revenue while legacy industries like brick and mortar retail are out of luck.
If you don’t do options, stand aside.
Here are the specific trades you need to execute this position:
Buy 23 March 2020 (ADBE) $315 call at…….…….………$40.70
Sell short 23 March 2020 (ADBE) $320 call at………….$36.55
Net Cost:………………..................……..…….………..…….....$4.15
Potential Profit: $5 - $4.15 = $0.85
(23 X 100 X $.85) = $1,955 or 19.55% in 16 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.
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.
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.
