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 - Microsoft Corporation (MSFT) – TAKE PROFITS
SELL Microsoft Corporation (MSFT) November 2021 $302.50-$307.50 in-the-money vertical BULL call spread at $4.98
Closing Trade
11-18-2021
expiration date: November 19, 2021
Portfolio weighting: 10%
Number of Contracts = 23 contracts
This was a short-term trade that software company Microsoft (MSFT) would stay above the strike price of $307.50 and we will easily stay above by tomorrow’s expiration.
All we got at the time of executing the trade was a 1% pullback which is rare for the best tech company in the world.
I believed we were in the midst of a risk on move for tech and that bet is turning out to be spot on.
So we are taking profits on all our tech positions.
Microsoft's dramatic growth over the past seven years was led by the expansion of its cloud services, which include Azure, Office 365, Dynamics, LinkedIn, and its other cloud-based software. The company reports the growth of these businesses together as the "Microsoft Cloud."
Microsoft Cloud's revenue rose 36% year over year to $20.7 billion during the first quarter, which matched its 36% growth rate in the fourth quarter.
Here are the specific trades you need to exit this position:
Sell to Close 23 November 2021 (MSFT) $302.50 calls at….………$38.70
Buy to Close 23 November 2021 (MSFT) $307.50 calls at………….$33.72
Net Proceeds:……………………..…….………..……...............................$4.98
Profit: $4.98 - $4.20 = $.78
(23 X 100 X $.78) = $1,794 or 18.57%
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.
