Trade Alert - (FB) July 1, 2021

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 - Facebook, Inc. (FB) – BUY

BUY Facebook, Inc. (FB) July 2021 $325-$330 in-the-money vertical BULL CALL spread at $4.45

Opening Trade

7-1-2021

expiration date: July 16, 2021

Portfolio weighting: 10%

Number of Contracts = 22 contracts

This is a trade that Facebook, Inc. (FB) stock will stay above $330 by July 16th expiration which is precisely 16 days from now.

After FB’s "partial victory" in court and "stellar" results driven by advertising strength, I am going to execute an in-the-money bull call spread in FB to take advantage of the short-term momentum in this name.

FB popped over 4% on the court ruling and we had to wait for the stock to pull back.

I like that we have technical support at $330 and a significant move up will be a profit-taking opportunity.

This is a short-term technical bet and I have been waiting for an entry point to get into this one.

Investors must love the stock but hate the company.

This puts off the anti-trust hounds for a while and I expect highly profitable ad tech stocks to do well right now.

Ad tech stocks like GOOGL and FB are the most profitable because not only do they have duopolies, but they don’t need to source material to build products in an inflationary environment and they are at the vanguard of the work-from-home movement.

The reopening of the U.S. should enrich GOOGL and FB even more and most importantly in an accelerated fashion.

Short-term, these dips are traders’ dreams and it’s time to strike while the iron is hot.

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

Buy 22 July 2021 (FB) $325 calls at………….…….…$24.05

Sell short 22 July 2021 (FB) $330 calls at…….…….$19.60

Net Cost:………...........……………..…….………..…….....$4.45

Potential Profit: $5 - $4.45 = $.55

(22 X 100 X $.55) = $1,210 or 12.36% in 16 days

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.

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.