• support@madhedgefundtrader.com
  • Member Login
Mad Hedge Fund Trader
  • Home
  • About
  • Store
  • Luncheons
  • Testimonials
  • Contact Us
  • Click to open the search input field Click to open the search input field Search
  • Menu Menu

Trade Alert - (AMZN) August 5, 2024 - STOP LOSS - SELL

Trade Alert

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.


Alert

 

 

Trade Alert - (AMZN) – STOP LOSS

SELL the Amazon (AMZN) August 2024 $150-$160 in-the-money vertical Bull Call spread at $7.25 or best

 

Closing Trade

8-5-2024

expiration date: August 16, 2024

Portfolio weighting: 10%

Number of Contracts = 12 contracts

It's tough to beat a global stock market panic.

Markets worldwide are in freefall as “de-grossing” breaks out with a vengeance. When all the hedge funds in the world want to go into cash at once, you don’t want to stand in the way. Don’t bother attempting any logic here about valuations. Out is out.

The stock market is now discounting a recession that isn’t going to happen. A reaction like this is what you would expect with a Nonfarm Payroll job LOSS of 500,000, which we actually got during the pandemic, not a GAIN of 114,000. But markets always overreact, as they are now run by similar algorithms and 25-year-olds who’ve never seen this before.

In one month, the price-earnings multiple for (NVDA) has gone from 40x to 28X. It’s now a classic “falling knife” situation. The best thing to do here is to de-risk, keep your hedges and shorts, and wait for the dust to settle.

What is the worst-case scenario? We are already down 10% from the top, so take it to 15%-20%. After that, we will have fabulously low prices from which to launch the post-presidential election rally.

How will we recognize the bottom?

1) Watch the bond market like a hawk, which has seen one of the most explosive rallies of all time, taking ten-year US Treasury yields from 4.50% down to 3.65% in a mere month. When it tops, stocks will rally.

2) A single positive data point could turn this market. The next one of any substance is the Consumer Price Index out August 14 in seven trading days.

3) An inter-meeting interest rate cut by the Federal Reserve. While rare, these can happen during economic emergencies. Is a stock market crash an “economic emergency”? Only if it spreads to the broader economy. Only Jay Powell knows for sure. One thing is certain. The pace and extent of interest rate cuts has vastly accelerated, greatly boosting the economy. Eventually, markets will figure this out.

While I didn’t handle this meltdown perfectly, I did pretty well. I went into it with four technology short positions in (NVDA) and (TESLA) and only one long in (AMZN) added days ago. All of my positions expire in nine trading days, thus greatly limiting the damage with very short expirations.

The important thing here is to live to fight another day.

I am therefore selling the Amazon (AMZN) August 2024 $150-$160 in-the-money vertical Bull Call spread at $7.25 or best.

DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.

Simply enter your limit order, wait five minutes, and if you don’t get done, cancel your order and lower your offer by 10 cents with a second order.

This was a bet that Amazon would not fall below $160 by the August 16 option expiration in 12 trading days.

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

Sell 12 August 2024 (AMZN) $150 calls at………….…............;……$13.00

Buy to cover short 12 August 2024 (AMZN) $160 calls at……..……$5.75

Net Proceeds:….……………….………..………….................…..............$7.25

Loss: $9.00 - $7.25 = -$1.75

(12 X 100 X -$1.75) = -$2,100

 

 

 

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.

 

Share this entry
  • Share on Facebook
  • Share on X
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share by Mail
https://www.madhedgefundtrader.com/wp-content/uploads/2016/02/Alert-e1457452190575.jpg 135 150 april@madhedgefundtrader.com https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png april@madhedgefundtrader.com2024-08-05 10:38:052024-08-05 10:38:05Trade Alert - (AMZN) August 5, 2024 - STOP LOSS - SELL

tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Mad Hedge Fund Trader (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade. 

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.

Copyright © 2025. Mad Hedge Fund Trader. All Rights Reserved. support@madhedgefundtrader.com
  • Privacy Policy
  • Disclaimer
  • FAQ
Link to: Trade Alert - (BRK/B) August 5, 2024 - STOP LOSS - SELL Link to: Trade Alert - (BRK/B) August 5, 2024 - STOP LOSS - SELL Trade Alert - (BRK/B) August 5, 2024 - STOP LOSS - SELL Link to: Trade Alert - (NVDA) August 5, 2024 - BUY Link to: Trade Alert - (NVDA) August 5, 2024 - BUY Trade Alert - (NVDA) August 5, 2024 - BUY
Scroll to top