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 - Salesforce.com, Inc. (CRM) - BUY
BUY the Salesforce.com, Inc. (CRM) December 2020 $195-$200 in-the-money vertical BULL call spread at $4.47
Opening Trade
12-2-2020
expiration date: December 18, 2020
Portfolio weighting: 10%
Number of Contracts = 22 contracts
Only use a limit order. DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
This is a short-term trade that underlying shares of Salesforce.com, Inc. (CRM) will stay above $200 by the December 18th expiration date.
Please use limit orders when executing the spread in order to avoid price gouging by the market makers.
Salesforce’s stock is down 9% this morning on the news that growth is slowing, and they overpaid for software company Slack (WORK).
The recent slowdown in the company's leading indicators, while partially explainable due to large M&A distraction, tough comparison, and a challenging selling environment among the distressed industries, is likely to weigh on investor confidence in the near-term and we see that in today’s price as this will delay any type of capital return to shareholders.
I do believe this is worth a buy the dip trade in the short-term and this is still a great tech company.
Traders can move up strike prices if they want to be more aggressive.
Here are the specific trades you need to execute this position:
Buy 22 December 2020 (CRM) $195 calls at……….….………$26.35
Sell short 22 December 2020 (CRM) $200 calls at………….$21.88
Net Cost:……………………..…….........................………..…….....$4.47
Potential Profit: $5 - $4.47= $.53
(22 X 100 X $.53) = $1,166 or 11.66% 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 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.
