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 - (PANW) – BUY
Buy the Palo Alto Networks, Inc. (PANW) September 2020 $230-$235 in-the-money vertical BULL CALL spread at $4.40
Opening Trade
8-27-2020
expiration date: September 18, 2020
Portfolio weighting: 10%
Number of Contracts = 22 contracts
This is a short-term trade that (PANW) will stay above $235 by September 18th.
The stock has had a minor pullback today of over 3% and it is time to put some capital to work.
Palo Alto Networks, Inc. (PANW) had another nice quarter like many of the cloud tech companies. PANW is one of the strongest cybersecurity tech firms from Silicon Valley.
Palo Alto Networks reported stronger-than-expected 4Q results on Monday as the COVID-19 pandemic-led work-from-home trend boosted demand for network security products.
Palo Alto's (PANW) 4Q revenues grew 18% to $950.4 million year-on-year, surpassing street estimates of $924 million. The network security solution provider’s adjusted EPS improved by a penny to $1.48 from $1.47 reported in the year-ago quarter, beating analysts’ expectations of $1.39. Its billings, which reflect future business contracts, surged 32% to $1.4 billion and exceeded the Street forecast of $1.2 billion.
Palo Alto's CEO Nikesh Arora said, "We had a strong finish to our fiscal year, driven by strong execution, work-from-home tailwinds, and continued success in next-gen security."
We are at nosebleed highs in the Nasdaq with outrageous moves like Salesforce (CRM) skyrocketing by 25% in just one trading day.
Remember one of the first lessons you learn as a trader – the trend is your friend.
If you don’t do options, stand aside.
Buy 22 September 2020 (PANW) $230 calls at………….………$26.35
Sell short 22 September 2020 (PANW) $235 calls at………….$22.00
Net Cost:………………………….………..………….….....$4.40 ($4.35 is midpoint)
Potential Profit: $5.00 - $4.40 = $.60
(22 X 100 X $.60) = $1,320 or 13.20%
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 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.
