Trade Alert - (GOOGL) June 22, 2021 - 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 - Alphabet Inc. (GOOGL) - BUY
BUY Alphabet Inc. (GOOGL) July 2021 $2,310-$2,315 in-the-money vertical BULL call spread at $4.20
Opening Trade – DOUBLE UP POSITION
6-22-2021
expiration date: July 16, 2021
Portfolio weighting: 10%
Number of Contracts = 23 contracts
I am doubling up my position in GOOGL with the same July 2021 $2,310-$2,315 Call spread. We also have the same position we executed 5 days ago for $4.30, now we are getting it for a cheaper rate of $4.20.
Bitcoin has bounced big intra-day recovering 7% after diving below $30,000 which is positive for overall risk sentiment.
Big tech is starting to break out with the likes of AMZN, APPL, and FB spiking in today’s trading. I would have liked to get in AMZN or APPL but the option prices are too expensive for my blood.
GOOGL is down today because European regulators are pursuing an anti-trust probe which is usually a non-issue that results in a paltry fine.
I am not worried about that.
The stock has barely nudged which is almost like a dip so we need to go back in short-term with a very targeted short-term call that Google will stay above $2,315 by July 16.
GOOGL stock has traded above its 50-day simple moving average since Nov 2020 and there is not much I see that will change that fact in the next 24 days.
This is a short-term bet that Alphabet (GOOGL) will stay above $2,315 by July 16th expiration. We now have 20% of our tech portfolio in this one position.
Remember, I took profits on a GOOGL bull June call spread on May 28th and they might as well call this the stock that doesn’t go down because the fundamentals buttressing this stock are more than brilliant.
GOOGL has to be the best FANG stock right now and it is firing on all cylinders.
The company generated strong top and bottom-line growth, even after adjusting for unrealized investment gains.
GOOGL has $135 billion in cash on its balance sheet and appears to finally be buying back shares.
It has a myriad of businesses that are working perfectly from Google search, Google maps, to YouTube and hardware.
GOOGL's recent earnings report showed elevated growth. Revenue grew 34% to $55.3 billion. That included 48.7% growth at YouTube and 45.7% growth at Google Cloud.
The reason you cannot buy the dip on GOOGL is because it hardly dips at all.
This year, the price action has been nothing short of spectacular and the stock is up big year to date in the first 7 months and has delivered far beyond expectations for the first 2 earnings reports that investors have no choice but to bid up the stock.
If you don’t do options, you should be holding the stock and never sell it.
Here are the specific trades you need to execute this position:
Buy 23 July 2021 (GOOGL) $2,310 at………….………$132.70
Sell short 23 July 2021 (GOOGL) $2,315 call at………….$128.50
Net Cost:……………………..…….………..…….....$4.20
Potential Profit: $5 - $4.20 = $0.80
(23 X 100 X $0.80) = $1,840 or 19.05% in 24 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.