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) – SELL – TAKE PROFITS
SELL – TAKE PROFITS Teladoc Health, Inc. (TDOC) March 2022 $79-86 in-the-money vertical BEAR PUT spread at $6.95
Closing Trade
3-8-2022
expiration date: March 18, 2022
Portfolio weighting: 10%
Number of Contracts = 16 contracts
This was a tactical bearish trade in remote medical services Teladoc (TDOC) that the underlying stock would go down and since we bought the put spread, the underlying stock went from $72 to $64.8, and now it's time to take profits.
TDOC is part of a bigger tech growth portfolio helmed by Cathie Woods’ ARKK Invest and that portfolio has gotten slaughtered this year as Woods 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 was 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.
We hit a home run on this one.
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.
Here are the specific trades you need to execute this position:
Sell to Close 16 March 2022 (TDOC) $86 put at………….………$21.70
Buy to Close 16 March 2022 (TDOC) $79 put at…….........…….$14.75
Net Proceeds:……………………..…….………..…....................….....$6.95
Profit: $6.95 - $5.63 = $1.32
(16 X 100 X $1.32) = $2,112 or 23.44%
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.
