Spring Cleaning: Let's Tidy Up Some Trades

I have been in a bit of a rut over the past week-and-a-half. This comes with trading. The worst thing you can do is pretend it doesn't exist. It happens. I know I'm not the only one who wishes every trade could be a winner, but that simply isn't the way things work. So, today I'm going to do some cleaning up. ITB The iShares Dow Jones US Home Construction ETF has done nothing but rally since my put thesis. I'm pretty sure I bottom-ticked that one. If you've never had the dubious distinction of bottom-ticking a short or top-ticking a long, you either haven't traded long enough yet or are incredibly lucky. However, I'm not ready to throw in the towel on this trade idea as the ETF is still below previous support, now resistance. Should ITB close above $38.25, then I'd pack up the tools, take the loss, and move on. 58.com One loss I will take here is on 58.com . The trade doesn't look horrible, but it doesn't look great either. And with the June $90 calls bleeding time, I'd rather cut this one quickly. The June $90 calls bought for $4.70 can be sold for $3.00. That's scrapping enough from the trade to provide opportunity elsewhere. Unfortunately, that's about the best spin I can give you on this one. Just disappointing. Cisco Systems My Cisco Systems trade idea is another disappointment. Earnings weren't bad, but guidance didn't inspire buyers. Ho-hum guidance isn't going to do it in this market. That being said, I'm willing to give the stock a few days. The trade here, a June 14 $44-48 call for $2.05 now sits at $0.87. My thinking on this one is to buy back the short leg (June 15 $48 call) for $0.07. While this may seem like throwing good money after bad, it has a purpose. By opening up the trade, I can make adjustments should CSCO rally. I might shift this to a butterfly or sell a lower strike. I'm willing to risk the $7 for some flexibility over the next week. iQIYI Not everything is bad news. iQIYI, Inc. has rallied sharply since the covered call trade idea. The negative here is the call sold could have been looser, but it is what it is. The initial trade idea, buying the stock and selling the June $17.50 call for a net cost of $15.30 is now trading around $16.86. A 10% gain ain't half bad and helps cover some of the above disappointment. Neurocrine Biosciences Biotech has been catching fire as of late and Neurocrine Biosciences has recovered from its post-earnings disappointment. The August $85 calls scooped up for $6.20 can be sold around $11.90. That's not a bad return since the May 1 entry. For traders holding more than one call, this is a great time to cut the trade in half. By snagging profits of $5.70 on half the trade, the net risk is cut to $0.50 on the remaining calls. That's the type of flexibility you want with biotech names. It gives you the opportunity to be patient and go for the monster home runs. A second option is to sell all your calls and buy August $95-105 call spread around $3.70 or August $90 -105 call spreads for $6.10. I'd prefer to sell half the position rather than go with the wider call spread. Frankly, I'd prefer not to cap the top on this one. This is a name I'd try to find a way to maintain upside exposure to with a defined risk. Let's see if we can turn things around Friday, but lightening the load here should help manage emotional capital enough to see clearly.

Spring Cleaning: Let's Tidy Up Some Trades

Not every trade can be a winner, so let's lighten the load here.

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