Trade Alert: Close These Three Put Trades Right Away

I can't say I'm exactly pleased that I was right about Starbucks (SBUX), but I am happy we closed our open put position prior to earnings. As I type, SBUX shares are down about 15% at $75 and change – we managed to avoid a steep drop in the stock.

In today's market environment, profit beats aren't always rewarded – and misses are severely punished. And I had a feeling that could happen to SBUX, so exiting our May 3, $82 put yesterday was clearly a good move. I've learned not to ignore that kind of trader's intuition, based on 30+ years' experience.

Just to add more color to the negative mood that's overtaken the stock market, consider the case of Super Micro Computer Inc. (SMCI) – one of the leaders in AI-powered computing. SMCI reported that quarterly sales surged 200% year over year last night after the close. And shares are still down about 13% this morning.

Such are the treacherous waters of earnings season during a stock-market pullback.

Ultimate Income members have three more open put options currently in profit, due to expire in just over two weeks: the Coterra Energy (CTRA) 17 May 24 $27 Put, the Microchip Technology (MCHP) 17 May 24 $82.5 Put, and the ProShares Ultra Semiconductor ETF (USD) 17 May 24 $80 Put.

In today's volatile and unforgiving market climate, I believe it's prudent to close these trades now to avoid the fate of SBUX, SMCI and many others.

After all, we can always reassess and open new put option trades in these same stocks down the road… once markets have stabilized. Here's what to do.

Actions to Take...

1. Buy to close the Coterra Energy (CTRA) May 17, 2024, $27 put option (CTRA240517P00027000) at market.

2. Buy to close the Microchip Technology (MCHP) May 17, 2024, $82.50 put option (MCHP240517P00082500) at market.

3. Buy to close the ProShares Ultra Semiconductor ETF (USD) May 17, 2024, $80 put option (USD240517P00080000) at market.

Place these three trades right away, and keep watch for more Ultimate Income trades and market updates coming soon.

Good investing,

Mike Burnick
Senior Analyst, Ultimate Income

P.S. If you have any questions or concerns, please reach out to me at support@tradesmith.com and include "Ultimate Income" in the subject line.

Customer Support: 866.385.2076 | support@tradesmith.com
Mailbag Questions

©2024 TradeSmith, LLC. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), in whole or in part, is strictly prohibited without the express written permission of TradeSmith, LLC. This work is based on SEC filings, current events, interviews, corporate press releases and what we’ve learned as researchers and writers. Our work may contain errors and should not be considered personalized investment advice. TradeSmith, LLC does not issue securities recommendations, and no discussion of a particular stock(s) should be interpreted as such. Past, simulated, and/or hypothetical performance of any strategy published by TradeSmith, LLC should not be interpreted as representational of future returns. You shouldn’t make any investment decision based solely on what you read here. It’s your money and your responsibility.

TradeSmith P.O. Box 340087 Tampa, FL 33694

Terms of Use

Privacy Policy

To unsubscribe or change your email preferences, please click here.