I found a good trade about 10 days ago in Intuitive Surgical (ISRG), Price and I were 'kicking' this idea around as we both saw the great setup at the time and the subsequent move higher. This one gave a signal about a week before earnings and had a strong move up just prior, yet the BIG payoff was on earnings. If we are in a trade that works (or is working) prior to earnings, do we roll the dice and stay with it all the way or is something else involved . I have had my share of wins and losses with earnings plays. By and large I would say the net return is positive on my plays but I certainly have had my share of unfortunate happenings (BBY, CSCO recently are two of them). If you are unfortunate to be on the wrong side, was it a mistake? Not in my view. But, when you have a situation that you timed correctly like ISRG, then you should be proactive and do something, or suffer the fate of uncertainty. I like 'one in hand is better than two in the bush'. Therefore, I usually take some off the table when given the chance. In this case, I had a trade working from mid January on the Feb 300 calls at 4 bucks, in two days they more than doubled so I sold HALF to lock in a win, then sold upside calls (Feb 320) to lock down that premium. In this case I could not lose regardless the result of earnings on Jan 20, and I could participate in gains up to 320. This was exactly how it played out, and managed to lock up a massive winner to end the week. Currently I have no position in this stock. Clearly a name like ISRG is higher risk and with earnings so close there was that uncertainty as well. But we remember charts speak loudly – especially when finding the biggest and best trends. What do you think?
Comments are closed