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Monday, September 29th
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“Life starts all over again when it gets crisp in the Fall.”
– F. Scott Fitzgerald
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How to Collect “Weekly Dividends” From Wall Street’s Most Liquid Stock!
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Major Market Events
- U.S. Government Shutdown Nears — As politicians meet, the White House signaled no change in its stance, instructing agencies to draw up lists of employees to fire
- Videogame Maker To Go Private — Electronic Arts, publisher of popular video games such as FIFA and Need for Speed to go private, investors include Kushner and Saudi Arabia
- Credit Market Stress Grows — Rising bankruptcies and signs of excess are putting investors on edge about corporate debt
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🤔 My Thoughts
CROX: Big Pop, Big Risk
How To Touch It (If At All)
We opened Friday’s Profit Panel talking about Crocs (CROX) — the shoe maker — and a new Sydney Sweeney marketing tie-in. The stock jumped, then shook around. It’s tempting to chase a move like that..
Here’s how to think about it, in simple terms.
First, Admit The Risk.
CROX has been in a downtrend. Buying a fast bounce in a weak stock is what traders call “catching a falling knife.” If it drops again, it drops fast. As we discussed on the show, any look here needs a line in the sand. If it breaks back below ~$72 and stays there, time to get out. No arguments, no hoping.
Second, Don’t Guess — Let Price Earn It.
If CROX can get back above nearby hurdles and close there, that’s proof buyers are showing up. If it can’t, keep your cash.
Third, If I Take A Shot, I’ll Cap My Risk.
Instead of buying the stock or a naked call, consider a small call debit spread with a short fuse — something like the Oct 17 $81/$82.50 spread.
On Friday we saw pricing around 50–60 cents during the discussion. With a spread, your worst-case loss is what you paid. If the bounce continues, the spread can double toward $1.00 as it moves closer to those strikes. If CROX stalls, you could close it early and keep most of your cash.
Last, Don’t Force It Into Earnings.
Short-dated options around earnings can be illiquid and wildly priced. If the calendar gets tight and spreads turn messy, pass. You can always revisit later.
The bottom line is this: A celebrity-fueled pop can spark a trade, but it’s not a plan.
Only take a small, defined-risk shot after CROX proves it with a daily close. If it slips back under ~$72, jump out. Cash beats “maybe.”
Click here to watch the on-demand replay!
And don’t forget to register your spot here to join us next time we go live!
To Better Trading,
Alex Reid
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