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 - Meta Platforms, Inc. (META) – BUY
Buy Meta Platforms, Inc. (META) February 2023 $155-$160 in-the-money vertical BEAR PUT spread at $3.75
Opening Trade
1-25-2023
expiration date: February 17, 2023
Portfolio weighting: 10%
Number of Contracts = 26 contracts
This is a short-term mildly bearish trade on Meta Platforms, Inc. (META) that META will stay below $155 in the next 23 days.
I don’t like this company’s business one bit and they aren’t positioned for the future which is why they are so desperate to crowbar the American consumer into some ridiculous virtual reality world where we are stuck in perpetuity spending our money inside of it.
While the stock has had a nice bear market rally in January, there have been whispers of a “hard landing” as Bank of America has delivered an ominous sign of sizeable layoffs coming up.
This could mean the short-term stop to the bear market rally that has taken place with momentum in January.
That means it would be prudent to initiate a hefty put spread position to hedge against my two long positions in PINS and AMD.
At the bare minimum, the market is signaling that it’s not a straight shot to the upper right in the short term and traders need to take heed of the signaling.
Here are the specific trades you need to execute this position:
Buy 26 February 2023 (META) $160 puts at………….………$20.50
Sell short 26 February 2023 (META) $155 puts at…….…….$16.75
Net Cost:……………………..…….……........................…..…….....$3.75
Potential Profit: $5 - $3.75 = $1.25
(26 X 100 X $1.25) = $3,250 or 33.33% in 23 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.
