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) – SELL – STOP LOSS
SELL Adobe Inc. (ADBE) March 2020 $315-$320 in-the-money vertical BULL call spread at $3.23
Closing Trade
3-9-2020
expiration date: March 20, 2020
Portfolio weighting: 10%
Number of Contracts = 23 contracts
This isn’t about tech or Adobe and how bad or good it is at this point, in a top-down world, tech companies take a seat to a health scare, crashing interest rates, or an oil price war.
If these black swans happen at one time, the markets get overloaded with sell orders.
Last Friday, we exited 2 of our positions with minimal losses as short-covering took hold of the market.
Our last position is Adobe and its time to dump and cut our losses before the options go to 0.
Everything is down 5% at the open and this could get really ugly for the Nasdaq before it is done today as many of the foundational pillars of growth disintegrated before our very eyes and is seriously testing the end of the tech bull market.
Expect upcoming mass layoffs at tech companies, energy companies, retail/hospitality/travel companies and banks.
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 was a short-term bet that software company Adobe will stay above $320 by March 20. But market conditions have deteriorated to the point that we need to reduce risk.
I was 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, but the negative news is overwhelmingly flooding sentiment and the fallout is real to tech companies.
Here are the specific trades you need to execute this position:
Sell 23 March 2020 (ADBE) $315 call at………….............………$23.35
Buy to Cover Short 23 March 2020 (ADBE) $320 call at……….$20.12
Net Proceeds:……………………........................…….………..…….....$3.23
Loss: $4.15 - $3.23 = $0.92
(23 X 100 X -$0.92) = -$2,116 or -21.16%
STOCKCHARTS.COM IS EXPERIENCING TECHNICAL DIFFICULTIES THIS MORNING
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
http://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.
