Accountability Adventure

It's time to play everyone's favorite game: Accountability Adventure. It's the first Friday of a new month, so it's time to take a look back at March and see how we did. I know this was a volatile month between tariff talk, Amazon attacks, and wild swings in the markets, but it doesn't give us an excuse not to examine our results. Not only do we have to trade the market in front of us, but we can't use it as an excuse to ignore the market behind...and how well, or not well, we did. I'm sad to say, but March proved yet again I am not a perfect trader like many you see on Twitter. Guess I'll have to try harder in April. But in all seriousness, here's the good, the meh, and the downright ugly from March. Again, I don't have a specific order, but try to tackle them chronologically if I can. Cloudera -- Clearly, we are getting the downright ugly out of the way first. The covered call trade into earnings was solid...right up until earnings. The company guided full year revenue growth to a disappointing 20% as the salesforce appeared to drop the ball. Subscription revenue remains strong at 50%. I do think shares are oversold, but the stock will take months to recover. If holding shares, I would look to sell out-of-the-money calls in an attempt to lower the cost basis. There is an analyst meeting coming on April 12th. I expect that to generate long-side interest, so I'd wait until after that to sell calls. Shotspotter shares were recommended at $21.82. Half the position was sold at $25.10, which proved too early as the stock has been on a tear trading just shy of $32. Still a favorite name for the next 18-24 months. Fortunately, this one took the sting out of CLDR. Qualcomm -- The ratio put spread for April lands in the meh category. Breakeven is $55, so this one still has a chance to escape the month unscathed. Still, it falls into the loser category. A trade war would have a negative impact on QCOM, so be aware. Advanced Micro Devices -- The weekly skip-strike butterfly in mid-March squeaked out a small profit if held until expiration. It provided a few early exits for larger profits as well. Overall, it was disappointing, but a profit is a profit, so we can call it a small win. Express -- I double dipped on this one with short April puts, which were closed for a small profit. Then, we jumped into shares at $7.32 that has risen to $7.65. Express had a big day yesterday and is up another 1.5% today. No complaints here. Square Square -- While the pre-earnings straddle was meh, the adjustments to the long side maxed out on the profitable side. The call to exit Square completely at $54.99 feels better now as the stock has slipped below $46. Stitch Fix -- Another green name in a sea of red today although the stock has done little since my recent trade idea. Fortunately, a ratio put spread that is long 1 April 20 $20 put and short 2 April 20 $19 puts has benefitted from the time decay. The ratio put spread generated an $80 net credit and can be repurchased for only $20 currently. Cheap enough to buy an April 20 $18 put here for $20 or $25 and lock in a profit of $55-60 while maintaining a $100 upside. Do it! Lock down a win here. Mellanox Technologies s started off strong, but has stalled with the market. The June $72.5-85 call spread has dipped into the $3's after a $5.20 entry. Earnings are set for April 17th, so if you're not willing to take the risk, take the loss here. Chipotle Mexican Grill was a late February trade closed out for a solid win in March. This risk-reversal turned $50 in into $520; however, it is fair to note that the short put had a high margin requirement. Shopify This April $145-165 call initially purchased for $5, barely provided time for escape, but the recommendation to sell went out with the spread still trading in the $8's. It's a win, but by the skin of our teeth as the Facebook FB concerns bled quickly into SHOP. iShares Treasury - A call spread bought for $2.15 was closed at $1.70. Not much to say here. Moderate loss on an uninspiring position. Roku continues to frustrate me. The bullish risk-reversal value has dipped from $0.65 to $1.15. If the stock can stay above $30.35 thru next Friday, it can be closed for a gain, but for now, it goes into the loser column. SolarEdge is a long-term position entered thru a January 2019 $50 call. The call is lower trading around $11.50 versus an entry of $13.80, so it is another loser currently, but with 287 days until expiration I don't see a need to make any adjustments. Molina Health Care is flat, but the trade is so new there isn't much to say yet. Quorum Health is in a similar mold as SSTI. The stock has exploded from the $7.50 entry point to almost $10. Half was sold at $9.25, but these two small names, QHC and SSTI, have truly eased the pain of a volatile month. Utilities Select SPDR falls into the neutral category. It's neither winner nor loser. The setup remains in place, but if rates continue to inch higher this isn't one where I'd tie up capital. Overall, that lands us with nine (counting EXPR twice) for the good guys and six for the villains. That ends our Accountability Adventure for this month. Until next time, have a great weekend!

Accountability Adventure

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