Hey Guys,
It was a bruiser of a morning for my portfolio. Two of those earnings trades went way south on me.
ZBRA and ROK both gapped down big time, well past my stop price. Since I use a market stop order, it automatically closed my positions at the opening bell. On each one, I ended up with a loss that's about three times that of a normal full-sized loss, so each one was like losing three trades in one.
There was a risk in holding those positions overnight, and I knew it. This time it clearly didn't work out in my favor. But it goes both ways. One time I posted a trade for Activision where the stock gapped up 30% overnight.
Also, back tests offer a lot of data that suggests that historically, overall, there might have been a payoff to holding these trades through earnings. But they also show increased volatility of profit outcomes on earnings trades relative to others, and today I felt the downside of that volatility.
It wasn't all bad today. My ETN stock position gapped up a bit past the profit target on its earnings release. And I locked in FTNT for a profit when it reached its time limit.
I picked up new positions today. In the main account, I bought stock for EA and KKR. In the options account, I bought options for SLV and KKR. In the double down account, I bought stock for STE.
If you have any questions or feedback, I'd love to hear from you.