How Are My Ideas Working Out? January Trade Review (Part 2)

In Part 2 of my January review of trade ideas (click here for Part 1), you'll notice I'm not recapping the opinion overviews on some names. Since most of those did not include a specific trade idea, the view on those is a bit more subjective. Feel free to peruse those when you have time. On to the last half of the month. 1/14 Allergen -- This was a February $150-160 call spread for $3.75 with a two-week timeframe in mind when the stock traded at $150. The thesis behind the two-week limit was the company's Jan. 29 earnings report and my hesitancy owning through the report. The stock hit $160 two days before the report and hung around the $158 the day before, giving traders plenty of time to double their money on the position. For anyone who rolled the dice, unfortunately, they came up snake eyes as Allergen's guidance missed the mark. 1/15 Nutanix -- The stock flashed breakout potential at $47.39, so the trade thesis here was to buy the Feb. 15 $47.50-52.50 call spread for $1.95. The stock has benefited from the market and pushed above $50. The call spread now sits at $3.00, up 50% and probably worth closing. 1/16 S&P 500 via SPY -- The SPDR S&P 500 ETF approached the 50-day simple moving average and I thought it would act as resistance, so I jumped on some Jan. 25 $260 puts at $1.78. They were profitable for about an hour the next morning. That's it. We all know what the SPY has done since breaking above the 50-day SMA. Needless to say, these were wiped clean from the map. 1/17 Coupa Software - There was no better way to make up for the SPY pain, than by buying the Feb. 15 $70 calls on COUP at $3.90 when the stock was at $70.67. The shares have rocketed over $80 and the calls are now around $13.10. This one is up 235% and worth rolling higher or closing down. 1/18 Roku -- After buying the Feb. 15 $42 straddles for $5.85, I thought this trade would be the biggest winner of the bunch. Unfortunately, ROKU has done very little. Thanks to the big implied volatility numbers in the stock, the straddle is still worth $5.25. I'd cut my losses at 11%, while they are still small. 1/23 Xilinx -- My favorite 5G name in the current market, I served up a February ratio put spread selling the $86 put to buy 2 of the $83 puts for a net credit of $90. After the company delivered a blowout report, this was repurchased for $5, locking down an $85 gain against $210 of risk. That's a respectable 40% gain, although the stock offered so much more in terms of upside plays. This was something of a losing winner. The remaining positions are all relatively new, but let's take a temperature on them: 1/24 TAL Education Group -- The post-earnings February $30 straddles bought for $2.50 have shown little life. They are trading around $2.05 and I would cut bait here. 1/25 Micron Technology -- The stock looked ready to roll higher, so the trade idea here was the March $38-44 call spread for $214. The run in the market Wednesday did not seem to help much. The spread closed at $2.00 on Wednesday. If I could escape with a breakeven or down only a couple of bucks, that would be my approach. 1/28 PACCAR -- Solid earnings have put the February $63-65.50 bearish call spread into the red. These were sold for $0.65 and now require $1.50 to close them. The intrinsic value is $1.35, so traders are getting a small discount to close it early. The max risk here is $195 with the current loss close to $85. It's a bit of a coin flip, but the setup and the market favor the bulls. Clearly, the first half of the month shaped up better than the second half where I grabbed a few positions expecting some volatility or profit-taking. I'd like to believe the Coupa and Allergen trades were enough to offset the losers, but even offsetting losses in a rising market isn't good enough. In the end, I'd say part one outperformed even a strong market, but Part 2 needs to be better, so I've closed out my open positions. I loaded the second half with too many countertrend and anticipatory trades, so I need to avoid that mistake until the market parameters change.

How Are My Ideas Working Out? January Trade Review (Part 2)

Clearly, the first half of the month shaped up better than the second half.

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