Trade Alert - (JD) April 22, 2022

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 - JD.com, Inc. (JD) – BUY

BUY the JD.com, Inc. (JD) May 2022 $63-$67 in-the-money vertical BEAR PUT spread at $3.20

Opening Trade

4-22-2022

expiration date: May 20, 2022

Portfolio weighting: 10%

Number of Contracts = 30 contracts

This is a tactical trade in Chinese internet platform JD.com, Inc. (JD) that it will not rise above $63 in the next 28 days.

I don’t think the lockdowns are over in China and they are menacing to JDs business model as Chinese consumers can’t earn a paycheck that goes into JD products.

The 4.8% of Chinese growth is just a dog and pony show, under the hood, there are many economic problems there.

This stock is highly volatile, and the Nasdaq is going through fits and starts, anybody risk-adverse should take a seat on the sideline for now.

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

Buy 30 May 2022 (JD) $67 puts at……….….………$13.60

Sell short 30 May 2022 (JD) $63 puts at………….$10.40

Net Cost:……………………..…….…….........…..…….....$3.20

Potential Profit: $4 - $3.20 = $.80

(30 X 100 X $.80) = $2,400 or 25% in 28 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.

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