{"id":10070,"date":"2012-03-04T19:17:36","date_gmt":"2012-03-05T00:17:36","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=10070"},"modified":"2012-03-04T19:17:36","modified_gmt":"2012-03-05T00:17:36","slug":"what-next-lessons-amazon-post-earnings-trade","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2012\/03\/04\/what-next-lessons-amazon-post-earnings-trade\/","title":{"rendered":"What’s Next and Lessons Learned After the Success of Amazon.com’s Post-Earnings Trade"},"content":{"rendered":"

(This is an excerpt from an article I originally published on Seeking Alpha on February 21, 2012. Click here to read the entire piece<\/a>.)<\/strong><\/p>\n

Congratulations to everyone who took on the post-earnings trade on Amazon.com (AMZN)<\/a>. Hopefully, you have locked in your profits by now given the 2-week timeframe for the trade. It is now time to revert to a bearish bias on the stock. {snip} Note well that I concluded in the AMZN post-earnings analysis that the risk\/reward for shorting AMZN is best AFTER AMZN has closed below the low (~$172) from the first post-earnings day<\/a>. Until then, I recommend staying on the sidelines and observing. If AMZN manages to close above its 200DMA (now around $203), I will reassess my bearishness.<\/p>\n


\n
\"Amazon.com's<\/a>
Amazon.com's post-earnings bounce came to an abrupt end once all post-earnings losses were erased<\/figcaption><\/figure>
\nSource: FreeStockCharts.com<\/a><\/strong>
\n<\/center><\/p>\n

The post-earnings trade was an even bigger success than I could have expected. I am posting here a summary of my execution and the rationale as potential notes and reference for future rounds of trades. {snip}<\/p>\n

Forcing myself to write all this out helped me identify three things:<\/p>\n

    \n
  1. I probably traded far too much even though it all worked out extremely well, even after commissions. The call spread would have expired nearly flat with my original cost. Next time, I may not be so fortunate. I need to work on sticking to the script and exiting cleanly.<\/li>\n
  2. Having said that, I learned that weekly options can provide extremely effective hedging and speculative trading at relatively low cost.<\/li>\n
  3. AMZN continues to be an extremely volatile stock day-to-day and intra-day. The options market seems to be under-pricing the risks. I am biased to continue playing highly leverage options on AMZN as long as this buyer’s advantage persists.<\/li>\n<\/ol>\n

    Be careful out there!<\/p>\n

    (This is an excerpt from an article I originally published on Seeking Alpha on February 21, 2012. Click here to read the entire piece<\/a>.)<\/strong><\/p>\n

    Full disclosure: no positions<\/p>\n","protected":false},"excerpt":{"rendered":"

    (This is an excerpt from an article I originally published on Seeking Alpha on February 21, 2012. Click here to read the entire piece.) Congratulations to everyone who took on the post-earnings trade on Amazon.com (AMZN). Hopefully, you have locked in your profits by now given the 2-week timeframe for the trade. It is now … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[599,32,135,62],"tags":[495,398,1597],"class_list":["post-10070","post","type-post","status-publish","format-standard","hentry","category-internet","category-options","category-stock-market-trading","category-technical-analysis","tag-amazon-com","tag-amzn","tag-technical-analysis"],"yoast_head":"\nWhat's Next and Lessons Learned After the Success of Amazon.com's Post-Earnings Trade - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2012\/03\/04\/what-next-lessons-amazon-post-earnings-trade\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What's Next and Lessons Learned After the Success of Amazon.com's Post-Earnings Trade - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"(This is an excerpt from an article I originally published on Seeking Alpha on February 21, 2012. 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