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.
Trade Alert – (FB) – BUY
BUY the Facebook (FB)??March, 2018 $190-$195 in-the-money vertical BEAR PUT spread at $4.45 or best
expiration date:??March 16, 2018
Portfolio weighting: 10%
Number of Contracts = 23 contracts
I am going to partially hedge my existing long position in Facebook, as it is trading weaker than the other FANG???s.
To lose money on this trade (FB) would have to rise above $190 by theMarch 16??expiration in??22??trading days. That is up??$8.79%??from the recent top.
Don???t pay more than??$4.65??for this position or you???ll be chasing.
Here are the specific trades you need to execute this position:
Buy??23 March 2018??(FB) $195 puts at??????.?????????$21.00
Sell short??23 March 2018??(FB) $190 puts at?????????.$16.55
Potential Profit: $5.00 – $4.45 = $0.55
(23X 100 X $0.55) = $1,266 or 12.35% in 22 trading days.??
To see how to enter this trade in your online platform, please look at the order ticket above, 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 Vertical Call and Put Debit Spreads by clicking here.
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Please keep in mind that these are ballpark prices only. There is no telling how much the market can move by the time you get this.
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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 close to expiration.
If you don’t get done, don’t worry. There are another 250 Trade Alerts coming at you over the coming 12 months.