Cool Cash-In On Yeti

Hey 5-Star Trader,

“Tuesday Trade” Journal: One of the most important concepts in trading is to review your work, and learn from the good and the bad. Identifying what is working is critical — to do more of it. So, to lead by example, each Tuesday, you’ll get a trade from my trading journal, in which I explain my thought process from start to finish. Trading is all about finding something that works and applying it over and over again. That’s how you find trading success. So study up on this “Tuesday Trade” and let’s get to work.

For “Tuesday Trade” this week, I want to outline my trade in Yeti YETI.

Often some of my favorite tickers to trade come from products I love. That is definitely the case with Yeti. From tumblers to coolers, my household can definitely say we love Yeti products. That’s why I keep an eye out and take trades with this ticker whenever possible.

Earlier last month I was on the lookout for “run into earnings” setups. When I was examining Yeti, I saw that it had a bounce off the 200 simple moving average (SMA) reversion to the mean targeting the 50 SMA. This, in combination with their upcoming earnings report date, made me buy four contracts ─ BUY +4 BUTTERFLY YETI 100 (Weeklys) 5 NOV 21 90/95/100 CALL @1.15 limit order (LMT).

However, because there was no squeeze accompanied with this setup, I adjusted my risk to a little less than 1.5% of my total account. Below is a picture of my entry order in Yeti.

A few days into my trade and Yeti was looking promising. Yeti was trading right up near my 95 target surprisingly quickly!

I decided to hold since I had more time left before expiration and I wanted to give it more time to mature. That being said, it was right at the 50 SMA and overbought after the nice run so I knew it needed to be watched closely.

Finally, after a little less than two weeks, Yeti broke above my target zone so I knew it was time to close out, securing my 40% in profits. ─ SELL -4 BUTTERFLY YETI 100 (Weeklys) 5 NOV 21 90/95/100 CALL @1.70 LMT. 

Interested in learning more? Check out my earnings “Hot Zone” tool and strategy. In this class, I will teach you the fundamentals of earnings trading.