Beyond Meat - what was I thinking?
We sold our Beyond Meat Strangle last week with a profit of 120 % - and now we are watching it jumping the way we predicted. Gimme pain killer.
They say, that missing a good trade hurts more than a loss. Well well that might be true. But I'd say, nothing hurst more than selling a profitable trade too early. And this happend to us again. And my feeling is it will happen to us again and again.
But lets start at the beginning. I stopped eating meat a long time ago (4 years to be specific) and beacuase of this I was eagerly awaiting the IPO of Beyond Meat (BYND) last year. stock opened high and I said to myself "too expensive to jump on this train". Boy was I wrong. I told everybody about the story before it IPO'ed and then I was the only one standing in the station watching the red lights of the train when it travelled to 240 $ (in words three hundred). After that I was sleepless for some nights.
TheLazyTrader (a website I really like) said it much better than I could do: "It’s that awful moment when you sit there watching a trade that you just “knew” was “perfect” head in the desired direction without you on board."
That experience in mind I was following BYND the whole way to see if there will be a Strangle chance some day. And then in late November it developed. BYND was lying flat in bed. Coming all the way down from 240 $ to a meager 80 $.
Chart produced with TC2000 from Worden Brothers, Inc.
From past experience I kind of knew that it can't sit there flat forever. The stock market is pumping from High to High. The lockup period is behind us. Many people are watching this fresh IPO as I do. So within the next months it can fall to 40 $ on any bad news or it can kick ass and kill all shorts by running up to 150 $ again.
November 26th we opened a Strangle ( Calls 100/May for 6,- $ / Puts 65/May for 6,25 $ ) and then we started waiting. And then in January it screamed up to 136 $ but closed the session below 120 $. We sold the whole position that day ( Calls for 25 $ / Puts for 2,- $ ) for a profit of 120 %.
AND NOW yesterday - premarket already 111 $ and I kind of felt, this might go up. And boy it did - all the way to 132 $ aftermarket. The Calls are trading over 32 $ and we sold them for 25 $ and I am afraid, that BYND might climb to +200 $ territory soon.
BUT - forget all that moaning.
TheStrangle principle is to identify Strangle opportunities, jump on the bandwaggon and leave the train when in profit (or when it runs against us, leave with a loss before it expires). As most of our lossed are between 20-40 % we have to take big winners to compensate for them to make the whole idea profitable. And as we had +100 % at our hands and BYND was not holding the highs - closing the stranle was what we did.
Who can complain about 120% profit within 2 months? I can't and so "buff one's mouth" and on to the next trades ;-)
In that sense - Strangle ahead !
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