Trade Alert - (COIN) May 25, 2021 - SELL-TAKE PROFITS
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 - Coinbase Global, Inc. (COIN) – SELL – TAKE PROFITS
SELL TAKE PROFITS Coinbase Global, Inc. (COIN) June 2021 $170-$175 in-the-money vertical BULL call spread at $4.80
Closing Trade
5-25-2021
expiration date: June 18, 2021
Portfolio weighting: 10%
Number of Contracts = 22 contracts
This was a short-term bullish in-the-money bull call spread on cryptocurrency exchange equity stock Coinbase Global, Inc. (COIN).
This was a trade that the underlying stock of COIN would stay above the strike price of $175 until June 18th and we are exiting the position accruing most of the possible profit.
COIN is up over 7% today, giving us an ideal exit point, as the price of bitcoin has recovered from a short-term low of $30,000.
We used the crypto sell-off to buy the dip in COIN and the underlying stock has gone from $224 at the time we executed the bull call spread to $242 now.
The selloff was partially caused by China whose Chinese regulatory agencies effectively banned any business dealings with cryptocurrency.
Tesla promptly banned the sales of their car using bitcoin to avoid clashing with Chinese regulators as they try to save their China business that has seen numerous headwinds operating in the Middle Kingdom.
What is COIN?
Coinbase Global, Inc. provides financial infrastructure and technology for the cryptoeconomy. The company provides primary financial account for the cryptoeconomy, a platform to invest, store, spend, earn, and use crypto assets; an online marketplace for hedge funds, money managers, and corporations.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
Here are the specific trades you need to exit this position:
Sell to Close 22 June 2021 (COIN) $170 calls at….………$73.40
Buy to Close 22 June 2021 (COIN) $175 calls at………….$68.60
Net Proceeds:………………..........……..…….………..….….....$4.80
Profit: $4.80 - $4.35 = $.45
(22 X 100 X $.45) = $990 or 10.34%
If you are uncertain on 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.
