Selling our CVNA put contracts to lock in profits.

Shares of CVNA are trading sharply lower following the company’s earnings announcement. The results were not good and the company plans to raise up to $1 billion by selling new shares to the public (which will reduce value for current shareholders).

While the stock could continue to fall, today’s sharp move leaves CVNA deeply oversold. I’d prefer to take our profits off the table and avoid giving them back if short-covering leads to a bear-market rebound.

We may eventually set up a new bearish position fro CVNA if the stock rebounds or consolidates.