Last week I told you about a bullish short-term bet we made on SVXY because the stock had dropped over $3 in the previous week (and historically, 4 out of 5 times when that happened earlier this year, the stock rose at least $3 in the subsequent week). We placed an order to sell half the calls if they had doubled in price, and that occurred on Tuesday. On Thursday, volatility soared due to the plane being shot down over Ukraine and Israel invading Gaza. It looked like we would just break even on the trade since we had recovered the initial investment, but then, on Friday, the stock rallied $6 and we were able to sell the remaining half for enough to give us a 32% gain on the trade. Not as much as we had originally hoped, but a gain of any sort is always welcome.
Finding Lessons in a Trade
The big lesson from our experience last week, one that we have had many times, is that there is . . .