A “to fade” play in Cerner — an in-progress trade review

For those that follow my trading you know that I do what I term a “to fade” trade frequently. These trades usually stem from out-sized moves up. I want to capture some of the expected profit taking.

I did the following trade in $CERN on 9/27:

  • Short stock at a $55 Trigger (these don’t often fill this well, was a lucky entry)
  • Long the October 55 Calls for $.75 debit
  • This is considered a Synthetic Put

I want to point out here that this is just a trade. I actually like the prospects for this company long-term so want to be clear on that.

Here are a few messages from @StockTwits on 9/27:

CERNSo let’s see where the stock is trading now:

CERNPrice is currently testing the closing price area from 9/27. This pullback is on lower volume so worth noting that for the Bull case. RSI has also worked off the over-bought condition.

For now the short stock trade is working so I don’t need to do anything. The long Calls are for October expiration so I have over 2 more week to let this trade play out.