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 - Pinterest, Inc. (PINS) – TAKE PROFITS
SELL – Pinterest, Inc. (PINS) September 2021 $60-$63 in-the-money vertical Bear Put spread at $2.85
Closing Trade
9-7-2021
expiration date: September 17, 2021
Portfolio weighting: 10%
Number of Contracts = 38 contracts
This was a short-term trade that social media tech firm Pinterest, Inc. (PINS) would stay BELOW the strike price of $60 in the next 15 days.
After a dead cat bounce, I went aggressive and executed a bearish bet that PINS wouldn’t rise past $60, and I am taking profits because what I predicted came true, PINS has shown extremely poor short-term price action.
I would be highly motivated to strap on another in-the-money put spread if PINS popped to the upside.
Just recently, PINS has experienced a bevy of downgrades because of poor third-quarter guidance as a result of shoppers shifting their attention back to physical stores and away from online shopping.
PINS monthly active users fell by 5% in the U.S. in the second quarter, and management guided for revenue growth in the low 40% range for the year. That represented a drop from the 58% growth from the third quarter of 2020.
The latest performance is akin to crossing red lines in growth technology and it is time to bully on the weak.
Readers shouldn’t be holding PINS stock whatsoever, migrate to higher ground in SNAP, TWTR, GOOGL, and FB.
DO NOT USE MARKET ORDERS UNDER ANY CIRCUMSTANCES.
If you don’t do options, stand aside.
Here are the specific trades you need to exit this position:
Sell to Close 38 September 2021 (PINS) $63 puts at…..………$7.30
Buy to Close 38 September 2021 (PINS) $60 puts at………….$4.45
Net Proceeds:……………………..……..................………..…….....$2.85
Profit: $2.85- $2.5 = $.35
(38 X 100 X $.35) = $1,330 or 13.92%
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.
