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 - Teladoc Health, Inc. (TDOC) – BUY
BUY Teladoc Health, Inc. (TDOC) March 2022 $79-$86 in-the-money vertical BEAR PUT spread at $5.63
Opening Trade
3-2-2022
expiration date: March 18, 2022
Portfolio weighting: 10%
Number of Contracts = 16 contracts
This is a tactical trade in remote medical services Teladoc (TDOC).
We took profits on a bear put spread last month on TDOC after the omicron virus peaked in the short-term, meaning that no incremental investor would be interested in buying TDOC in the short term.
TDOC is part of a bigger tech growth portfolio helmed by Cathie Wood's ARKK Invest and that portfolio has gotten slaughtered this year as Wood has no concept of market timing and indiscriminately buys tech at any price based on a zillion year time horizon. She also said that she is seeing deflation two weeks ago in this market which is an outright breach of fiduciary duty to investors. Since her interview, Russia has invaded Ukraine and oil has spiked to $110 per barrel of crude.
Any novice investors should just wait for Wood to speak and do the opposite and there is in fact an ETF for that very purpose.
TDOC is ARKK fund’s biggest holding, and they just underwent a relief rally as the market is betting that Jerome Powell will become more dovish. The rally was a dead cat bounce.
This is a GOLDEN OPPORTUNITY to sell the hell out of TDOC, and ARKK funds for a no-brainer short-term trade of 16 days as the fresh inflation numbers should start to trickle in.
This is just the beginning of elevated inflation brought on by another foreign war and Americans are about to be hit by a wave of higher food and energy prices.
That spells trouble for underperforming growth tech and TDOC is the poster child for that.
Don’t buy this stock – if anything, sell the rallies like we are doing here. Growth tech is dead for the foreseeable future.
This bear put spread options trade is a short-term wager that TDOC will not rise above $79 in the next 16 days.
Here are the specific trades you need to execute this position:
Buy 16 March 2022 (TDOC) $86 puts at………….………$15.23
Sell short 16 March 2022 (TDOC) $79 puts at…….…….$9.60
Net Cost:……………………..…….……..…................…….....$5.63
PRICE IS $5.63, TEXT MESSAGE PRICE OF $5.73 WAS AN ERROR.
Potential Profit: $7 - $5.63 = $1.37
(16 X 100 X $1.37) = $2,192 or 24.33% in 16 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.
