Exits, 5/26/2023

How we did on the trades we exited this week.

Slyzyy/Pexels

This Week’s Trade Exits

As soon as I exit a trade, I note that in the comments of the post where I first mentioned the trade; at the end of the week, I try to track them all in one post. These are the trades I exited this week:

Stocks or Exchange Traded Products

None.

Options Trades

1. Call spread on American Eagle Outfitters ( AEO 0.00%↑). Entered at a net debit of $0.45 and exited at a net credit of $0.85, as noted here. Profit: 88%

2. Put spread on Manchester United ( MANU 0.00%↑). Entered at a net debit of $0.30 and exited at a net credit of $0.30, as noted here. Loss: 25%

3. Call spread on On Holding, AG. ( ONON 2.31%↑ ). Entered at net debit of $0.48 as noted here, and it will expire worthless. Loss: 100%

4. Put spread on Farfetch, Ltd. ( FTCH -2.58%↓). Entered at a net debit of $0.39 as noted here, and it will expire worthless. Loss: 100%

5. Call spread on DICK'S Sporting Goods ( DKS 2.46%↑). Entered at a net debit of $0.24 as noted here, and it will expire worthless. Loss: 100%

6. Put spread on Abercrombie & Fitch (ANF 3.78%↑). Entered at a net debit of $0.48 as noted here, and this will expire worthless. Loss: 100%

7. Call spread on e.l.f. Beauty (ELF 0.00%↑). Entered at a net debit of $2.35 and exited at a net credit of $4.25 as noted here. Profit: 81%

8. Call spread on Autodesk ( ADSK 0.00%↑). Entered at a net debit of $1.10 and exited at a net credit of $1.45 as noted here. Profit: 32%

9. Puts on First Republic Bank ($FRCB). (The symbol changed from FRC after it went bankrupt). Entered at $1.36 and sold half of my position at $2.70, as noted here. Profit: 99%.

A Few Thoughts

We took more losses on earnings trades based on social data. The biggest negative surprise (for us) was Abercrombie & Fitch, which had very bearish social data and yet posted blowout earnings. I asked the co-founder of the social data firm I’ve been using what might have gone wrong there. Was there a wave of buyers in the first quarter who weren’t on social media? Maybe grandparents buying clothes for their grandchildren? He said they were looking into it, and also looking to add additional sources of data to improve their accuracy.

One thing I’m going to do going forward is check with Zacks’ Earnings ESP (Expected Surprise Prediction) on earnings trades. They did get Abercrombie right this week.

I’m going to continue placing earnings trades based on social data (albeit maybe more selectively), because social data does seem to offer a slight edge over time, but these social data trades are looking a bit more like coinflips right now, and if your risk tolerance is less than mine, you may want to consider focusing more on some of our other trades, like our core strategy of buying Portfolio Armor top names,

Or our recent bets against regional banks,

We’ve had some recent wins on both fronts recently, including a couple on the top names front that haven’t shown up in our exits, because we only exit stocks in our core strategy when we get stopped out. For example, I’m currently up about 70% in Nvidia ( NVDA 0.00%↑ ) and other subscribers are up about 114% on Super Micro Computer ( SMCI 0.00%↑) .

Enjoy the holiday weekend.