Trade Alert - (FISV) April 14, 2020 - BUY
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 - Fiserv, Inc. (FISV) - BUY
BUY Fiserv, Inc. (FISV) May 2020 $80-$85 in-the-money vertical BULL call spread at $3.95
Opening Trade
4-14-2020
expiration date: May 15, 2020
Portfolio weighting: 10%
Number of Contracts = 24 contracts
This is a short-term trade that Fiserv, Inc. (FISV) will stay above $85 before the expiration date of May 15.
The stock is down over 1% this morning in a largely massive bullish day for tech equities.
I recommend taking profits on the first lurch higher in shares as tech shares whipsaw around in a tough trading climate.
The Fed’s “buy anything at any price” attitude to prop up credit markets and even the junk bond market has been highly effective in preventing another crash in tech equities and even though main street won’t likely be a recipient of a “v-shaped” recovery, tech stocks have experienced “v-shaped” price action in the past 30 days.
This is exactly why tech shares are the place to be as they lead the recovery.
Fiserv, Inc. (FISV) is one of the most stable fintech companies around and I believe this is a good place to hide during the pandemic.
I like that they have a beta of .88 in the past five years and they earn over $1 billion in profits each year.
The elevated implied volatility finally gives us a little bit of cushion on this call spread.
The risk – rewards to this trade is quite favorable.
If you don’t do options, buy and hold.
Here are the specific trades you need to execute this position:
Buy 24 May 2020 (FISV) $80 call at………….………$17.90
Sell short 24 May 2020 (FISV) $85 call at………….$13.95
Net Cost:……………………..…….………..……...............$3.95
Potential Profit: $5 - $3.95 = $1.05
(24 X 100 X $1.05) = $2,520 or 25.20% in 31 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 on “How to Execute a Vertical Bull Call Spread” by clicking here at
https://www.madhedgefundtrader.com/ltt-vbpds/
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.
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 Bull Call Spread” 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.