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$WYNN beat estimates yet gave me a headache

Today, I feel bitter about my WYNN trade.

Last week I decided to take a few trades against WYNN and stretch my account a bit because I was confident that I would be out of those trades before earnings. It was a great opportunity trade!

Brokers were listing that WYNN was going to report earnings on August 3rd. Put premiums were juicy and all set to expire this Friday. I would collect nice premium before earnings.

So I opened three trades and sold 3 put contracts per each trade (total 9 contracts):

-3 WYNN Sep2 87 put
-3 WYNN Jul29 96 put
-3 WYNN Jul29 97.5 put

Suddenly the company announced that they would report on July 28 end of the trading day. Ouch! Suddenly I was holding trades thru earnings!

 
Spooked Trader
 

I knew (expected) that WYNN would report great results but I wasn’t sure how would market react. Today, the market is driven by a crowd of morons. Crowd is stupid and primitive. It can get spooked by falling leaves from the tree in autumn and stampede for exit.

And sure enough. WYNN sold off after hours. It fell from 104 a share to 96 a share. I had a problem.

I had to manage those trades, but since I expected them to expire without being jeopardized by earnings I stretched my account and I was running low on cash. My account ran out of buying power at some point and that meant I couldn’t roll the trades. All I could do was close trades. And closing trades meant closing at a loss!

I had to day-trade and use market fluctuations to adjust the trades. I was successful doing it and I could close majority of the trades and roll two contracts into next week.

Although I closed those trades with profits, moved the last two contracts away in time into the next week I still have a “bad taste in my mouth”.

Below is my journal indicating all trades I made this week and today with WYNN to maneuver it out of a problem:

 
WYNN trading journal
Click to enlarge
 

This month, I was able to exceed all my expectation about my trading revenue.

Last month, I made $2,331.00 in collected premiums. I haven’t expected exceeding this number. I hoped for $3,000 revenue at best or at least matching June, mainly when for the first 10 days of July all I made was $2 dollars. Yes, two dollars.

I was thinking that this could be a blow to my plans trading for a living one day. I can’t live off of 2 bucks!

Yet, in July 2016, I made $5,734.00 dollars in collected premiums. This is more that what I make at my 9-5 job working 45 hours a week and having to deal with my boss and unreasonable clients!

But if WYNN ended as planned before they announced earnings reporting in July instead of August 3rd, I would end with premiums way over $6,000 dollars for the month. Maybe this is why I feel horrible.

And that’s wrong. This is emotions. Greed. Emotionally greedy. The best way to lose it all. I think I need to slow down. Yes the revenue for this month is gorgeous, but I stretched my account beyond all my rules. I acted like an idiot. Preach water, drink wine.

Now I will focus more on managing open trades and slow down in opening new trades to only one or two trades per week and considering all rolls as a new trade for that week. I also need someone to slap my hands when I get itchy trying to open a new trade because of an “irresistible one time opportunity right now” feeling. No way grasshopper, there will always be opportunities in Wall Street, no need to rush to all of them.

And the lesson? Even if a trade looks to be the safest trade on the planet, it doesn’t warrant breaking the rules.

Good luck guys and have an excellent weekend!





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