Trade Alert: Locking in profits from last week’s options buys

Stocks up early. Oil +7% to almost $35. I’d mentioned I’d bought some $UA and $FB earnings into those panicky lows last Wednesday and both of those companies reported blowout earnings.

We caught both of the two largest movers in the earnings reports today with our call options that we bought when the $DJIA was down -550 at last Wednesday. Under Armour UA is up nearly 20% today and now up 30% from last Wednesday’s lows while Facebook is up 15% today and now up 20% from those lows. Our call options have more than doubled in value and I’m going to lock in some profits.

But the main two reasons that $UA is up 20% this morning and not just 5% off the fact that the company beat earnings and revenues expectations just a little bit even as expectations were very low are these: 1. Shoe sales, led by basketball and Golden State’s Steve Curry’s impact as the lead endorser, were up 95%. 2. International sales were up 70%. Both could potentially be much bigger segments for the company ahead. Not to mention as a member in the Trading With Cody Chat Room reminded me this morning, 15% of UA’s shares are sold short, so there’s a squeeze going on today impacting the stock too.

Remember that I’ve called $UA a stealth app company because nearly 3/4 a billion dollars since 2013 to acquire three of the main health and fitness app companies including MapMyFitness, Endomondo and MyFitnessPal. Here: “The acquisitions have provided Under Armour with a community of roughly 160 million plus registered users, according to Under Armour, who log information such as what they eat and their running routes. Fourth quarter sales for Under Armour’s connected fitness segment surged 221% to $16.9 million.”

Under Armour is a new position for me and I’m going to sell all of my UA call options for $13-15 here which is more than double what I paid for them. I might look to start a longer-term common stock position in this name in weeks ahead, but not today while it’s spiked up.

Facebook is already a big position for me in the portfolio courtesy of the fact that I made it a Top 3 Largest Position back when it was in the teens. So I’m going to go ahead and sell all my Facebook call options and lock in the double, letting the core position in FB common that I own stand steady.

We’re down 20% on the Sony call options so far, and I’m just holding those steady for now.

Qualcomm is down 6% today after a quarterly report and guidance that were just about inline. My cost basis on $QCOM is at about these levels, and I probably won’t do another tranche until it makes either a 10% or so move lower or some more time passes.

Biotech is getting crushed again, with the $IBB down nearly 5% today and now down more than 10% since we put that short back on earlier this week. I’d barely gotten started building that short up again, and I’m just letting it continue to do its work as a hedge for me for now.