Stock / Symbol: Best Buy / BBY
Price at trade opening on Nov 5th: $45.18
Price at trade adjustment on Dec 7th: $41.93
Reasoning: Best Buy got crushed today by a bad earnings report. While we do theoretically have till June to work our way through this trade, it's not likely that we'll see BBY above our current break even price of $48.64 by June expiration. In hindsight, we should have added some puts to this trade to protect ourselves coming into earnings. Bottom line, we strayed from our philosophy of reducing risk and replaced it with greed. On the bright side, had we gone long 200 shares of BBY instead of 2 contracts, we'd be down $1,976 instead of just $610.
Trade Details:
BTC -2 BBY Dec10 45 Calls @ $0.01
STC 2 BBY Jun11 45 Call @ $0.61
for a net credit of $0.60
Max Risk: $730
Realized Loss: $610 (includes $96 gain from sale of 2 Dec 50 calls)
Chart:
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