July 12th, 2023
We Just Booked Our 7th Winning Trade in 2023 on This Cash Cow
Options Income Weekly members kicked off the week with a winning trade on Crocs (CROX), booking $50 per contract in cash and earning a 0.5% return on their capital in just three days.
This was our seventh winning trade on the footwear maker this year and 13th since we began trading it in Options Income Weekly back in October 2020.
Here’s a look at our CROX trades from 2023:
So far this year, we’ve generated $413 in cash from CROX with just one contract sold. Meanwhile, our average trade has returned 0.6% and our average holding time is just over six days.
Crocs is a cash cow that has been growing revenue and earnings at an impressive rate over the past few years.
The stock has taken investors on a wild ride in 2023. In mid-February, shares surged after the company reported better-than-expected Q4 earnings and optimistic guidance for 2023. In late April, the company’s Q1 results once again blew past analysts’ estimates. However, shares sold off sharply when Q2 guidance came in lower than expected.
Since the post-earnings sell-off, CROX has been bouncing around in a range between roughly $105 and $120. But that’s fine by us! We’ve taken advantage of this range – and the stock’s above-average volatility – to sell options, raking in premium and closing out multiple winning trades.
We entered our latest trade on Friday, wanting to put some cash to work ahead of the weekend. We sold the CROX 21 Jul 103 Put for $0.85, or $85 per contract, and let members know we were looking to exit the position at $0.40 or less.
The stock popped on Monday morning, with shares up around 4% by 10:30 a.m. Eastern. Meanwhile, the premium on the put we sold fell to the $0.35 level.
So, we recommended members book a profit of $0.50, or $50 per contract, earning a 0.5% return in just three days.
Now, as it happens, CROX continued to rally on Tuesday, gaining another 2.6%, meaning we could have gotten out at a better price had we waited. But there are no certainties in trading, and there is no such thing as a foregone profit. CROX could have just as easily reversed on Tuesday. And there’s no telling what may happen with the stock between now and July 21 when the option expires.
The only thing you can count on in trading is cold, hard cash. So, we’re going to keep booking profits when we have the chance rather than getting greedy and trying to wring out every last bit of premium from a trade.
Sure, we’ll miss out on some more income here and there. But we’ll also reduce our chances of having a trade move against us. And given our track record in Options Income Weekly over the past few months, we can confidently say this strategy has been working for us.
Any trade or trade idea discussed is for educational purposes only. They will not be tracked as an official trade recommendation.7
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