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) STOP LOSS
SELL the Facebook (FB) July, 2017 $160-$162.50 in-the-money vertical bear put spread at $1.89 or best
Closing Trade
7-13-2017
expiration date: July 21, 2017
Portfolio weighting: 10%
Number of Contracts = 44 contracts
If you play with fire, you get burnt.
Live by the sword, die by the sword.
If you can't stand the heat, get out of the kitchen.
Facebook (FB) has gone ballistic on Yellen's highly dovish comments yesterday, as have the rest of the FANG stocks.
This is very unhealthy for the market, for it shouldn't be chasing this year's leaders when they are up 40%.
However, I have a fabulous performance for 2017 to protect, up some 24%.
So I am going to stop out of my position here and take a small loss.
That means selling the Facebook (FB) July, 2017 $160-$162.50 in-the-money vertical bear put spread at $1.89 or best.
Our remaining positions should allow us to stay well up this month by the July 21 options expiration.
If you bought the stock instead, keep it. Facebook will be a long-term winner.
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 on How to Execute a Vertical Bear Put Spread by clicking here at http://www.madhedgefundtrader.com/ltt-executetradealerts/.
You must be logged into your account to view the video.
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.
Be sure you've signed up for our FREE text alert service. When seconds count, this feature offers a trading advantage. In today's market, investors need every advantage they can get.
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 with only 13 days to expiration.
Here are the specific trades you need to execute this position:
Sell 44 July, 2017 (FB) $162.50 puts at...............................$4.00
Buy to cover short 44 July, 2017 (FB) $160 puts at...........................$2.11
Net Proceeds:.....................................................$1.89
Loss: $1.89 - $2.22 = -$0.33
(44 X 100 X -$0.33) = -$1,452.
