As much as I hate doing this, I do it to protect gains.
If the Fed says the wrong thing this afternoon, they will crash the market furiously. While that’s the last thing any of us want to see, it’s best to prepare for it.
While holding the BABA July 135 calls, consider selling to close the second halves of the BABA January 90 calls for up to 127% gains, as well as the BABA April 105 calls for up to 61% gains.
I remain very confident in much further upside in BABA. It’s just best – and safe – if we protect ahead of what the Fed could easily destroy today.
At the same time, sell to close the second half of the DIA December 166 calls for up to 50% gains, too.
Again, I hate doing this. But remember this. If the Fed says the wrong thing, I don’t want to see hard-earned, fast gains wiped out.
Ian L. Cooper
Inside Value Trader