Square (SQ) have been on a tear lately. But last Friday I noticed a reversal pattern on the candlestick chart. Take a look at the post reporting this reversal and me buying the Puts at Bought Put Position with Square.
Normally when I see a stock I feel is gonna go down I’ll sell a Call. This time I decided to buy a PUT. I felt so strongly about a reversal I didn’t even wait for a conformation candle. It’s best to wait until the next day to see what the stock does to confirm that the reversal has started. When I saw the stock hitting resistance at the high $82’s and the stock also hit resistance in the past at the same level I decided not to wait until the next trading day. Not a smart move, but as I said, I felt very strong!
I bought 10 0f the 6/16/19 $80 Puts for $2.92. I went out to August for protection. I went into the position to pick up 50¢ for a $500 profit. I felt it would happen fast! Well 4 days later, which included the weekend, I jumped out today with a $530 profit.
7/12/19 – Buy to Open 10 SQ 8/16/19 $80.00 P @ $2.92 ($2920)
7/16/19 – Sell to Close 10 SQ 8/16/19 $80.00 P @ $3.45 ($3450)
Profit +$530
I invested $2920 for 4 days and had a Rate of Return of $18%. Fantastic!
Try to lock up $3000 with a bank and see what they’ll give you. This is why you have to re-program your brain for weekly and monthly returns and forget about annualized returns
Steve
The Options Coach