Closing A Trade… A Bad One

By: ispeculatornew
Date posted: 05.19.2014 (2:45 am) | Write a Comment  (0 Comments)

      Post a Comment

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:

rax

The result?

rax2

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:)

 

If you liked this post, you can consider subscribing to our free newsletters here


No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.