Selling our DE call contracts.
Shares of DE traded sharply lower on Friday after the company reported earnings.
While DE beat analyst expectations, management comments about inflation and supply chain issues worried investors.
The stock dropped well below our $330 strike price. And while shares are rebounding today, the decline was large enough to hurt investors’ confidence and break the chart pattern which was previously bullish.
We’ll use today’s rally to exit our position. Thankfully, our strategy of buying in-the-money call contracts helped to preserve some value from this position despite the swift drop.