CGNX has been underperforming while billions seem to be pouring into the market of late. Once a darling, and with a big nasty double top on the chart I am thinking of getting long. US markets seem to be manipulated and have painted themselves into a corner where everything MUST go up. I am making another non-Tasty Trade in my smaller reg-T account because volatility is low and I need better risk/rewards to grow a small account. Volatility rank is 19.5% (and that with the skew from the Feb sell off) Anyways I am going to buy the Nov 50 call and sell the Nov 55 call for $1.46 ..... basically risking 1.50 to make 3.50. This gives me 158 days to be right but with earnings on July 30 may be basically an earnings trade. This is my way of adding positive deltas (FOMO) with a risk/reward ratio that may pay enough to offset my other non-neutral trades. With Cognex currently at 46 this trade has considerably less probabilities of being successful (42% if you use the delta of the 50 strike as probability of expiring in the money, which it needs to be considerably higher than -----55 is quite far and only a 25 delta) I had a few underperforming stocks to choose from ANET, MMM, NTES, HON, CBM, AMWD.....but chose CGNX for the 5 wide strikes and overall non-correlation to SPY. Wish me luck!
Trade closed manually:
Decided to close this trade today due to the fact that this momentum name has had no upside momentum while the entire market has rallied for 3 straight days and with earnings on July 30 and the trade being placed on June 11 has me rethinking this idea. If they had buybacks or if big institutions were buying it would have shown already. Closing into strength but for a mere .10 just means I can try something better hopefully.