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) – SELL – TAKE PROFITS
SELL TAKE PROFITS Fiserv, Inc. (FISV) May 2020 $80-$85 in-the-money vertical BULL call spread at $4.90
Closing Trade
4-29-2020
expiration date: May 15, 2020
Portfolio weighting: 10%
Number of Contracts = 24 contracts
We are pocketing 90.48% of the possible maximum profit as we exit our Fiserv May 2020 expiration in-the-money call spread.
I’ll leave the last 10 cents on the table for the next guy.
The underlying stock is up 5% today after Google announced 13% revenue growth in apocalyptical economic conditions signaling that the rest of tech will get through the health crisis unscathed.
Fiserv is one of my favorite fintech companies and this is a great buy and hold stock.
The stock is massively overbought in the short-term and to turn my sights on our current FISV put positions - we do have a 5% cushion for our 2 FISV put spreads.
I will be monitoring these positions closely and they were largely put in place to hedge our Microsoft, FISV call spread, and Box equity position.
Now that I have taken profits in 2 long positions today (MSFT & FISV call spreads), I re-established a long Akamai call spread and will try to cut my FISV put spread positions in half on the next leg down.
Fiserv comes out with earnings in 9 days and I hope to at least cut my 20% weighting down to 10% by then.
On to the next trade.
Here are the specific trades you need to execute this position:
Sell 24 May 2020 (FISV) $80 call at…………...............………$25.20
Buy to cover short 24 May 2020 (FISV) $85 call at………….$20.30
Net Proceeds:……………….................……..…….………..…….....$4.90
Profit: $4.90 - $3.95 = $0.95
(24 X 100 X $.95) = $2,280 or 22.80%
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.
