Not All Trades Work Out - SQ Calls

Most traders are not open enough to show you their loses. They only post winning trades or trades that netted insane gains. Well, if you know anything about trading there’s no way that every trade is going to win.

I thought I would share a recent trade that’s certainly looking to be a fairly large looser for me. I wanted to share this because I got caught up emotionally and that blinded me to the risk I was taking on.

So the stock is SQ. As you can see in the chart below over the last 10 days we have essentially run from $100 to $136 in a straight line.

I got caught up in the buzz because I’m a believer in SQ and a fairly heavy user of their services. I believed that this stock could run up to $150/share. I still think this, but with options you set a time. If the stock does not pass your strike it expires worthless. So I decided to open some 7/10 call around $133. The strikes were $134 and $135.

On this day we got a few analyst upgrades and momentum seemed in my favor. I was pretty happy when I looked up the after market data and saw we were trading at $13. I thought this was going to be a big winner the next morning.

However, right around $136 we get an analysts downgrade and the price cratered.

The bears piled on, the markets turned red on some political/covid news and profit taking took us back to the $127 range... The calls expire today and I’m already down $400 so my guess is they will be worthless at open.

I’m hoping we get a bounce, but that’s just to recover some of my lose as I need a pretty big move to make a profit.

Looking back at this trade I got caught up in the FOMO and it’s easy to do. I should of not bought calls on stock that’s run up so quick. Premiums were high and the slightest pullback would plummet the options prices just like what happened.

Cross your fingers for me, but I’m fine taking the lose as it’s taught me a lesson. I’m wondering what’s your worst trade?