No matter how you look at it, trading so far has been very good so far this year, and long & short tech stocks. Partially for that reason, last Monday I decided to do something that I usually avoid. I traded a stock a few hours before it was set to announce earnings. Rackspace (RAX) is a company that I’ve been negative about for some time and I had a very successful trade earlier this year. I believed there was more downside and that the stock might tank after releasing earnings. So I shorted it. In the end, the stock rebounded a bit after announcing “decent” earnings. It wasn’t a big issue and didn’t reach my stop-loss. Then this happened:

The result?

Ouchhhhhhh… Trading always carries some risk and when shorting a stock, it can end badly if some big M&A news is announced.

So that trade will be closed on today’s opening and is likely to be -50%… taking down my average on those trades this year to 6.11%. Still very solid but obviously less so. Oh well, you win some and lose some:)