A review of a dip buy in Nu Skin

I was active in pre-market action today as I initiated a partial new long stock trade in $NUS & $BBY:

NUS_BBYHowever, I thought I would provide some detail on what I did as the next steps for $NUS given the number of questions I received about it. Here is what I did next:

NUS_pounding_BMy thought here was simple: protect the capital and switch to an Options only position. Risk defined, reward potential known, a few pennies in the bank. Now comes the next step where I use a less traditional exit by selling the long calls only (hit a Stop that I had defined):

NUS_pounding_CI felt a second down leg was quite possible so I wanted to leave myself room to work the short Calls for that purpose. I had intended on selling a Put Spread & use the proceeds to cap the short Calls above. Never got to that step though. Little did I know that the stock would get halted and when opened, price moved down a LOT more. This is what I did next:

NUS_pounding_DSince the stock re-opened and sunk below the $70 level I elected to spend some of the available cushion ($15.11) and create a Call Spread. I now own the February 80/95 Call Spread and can let the position ride. A $7.11 gain is booked already.

This is what the Daily chart looks like for $NUS:

NUS_pounding

7 thoughts on “A review of a dip buy in Nu Skin

  1. On this new down move in $NUS the long Feb 80 Calls hit a Stop at $12.15 (thought I gave
    it enough room) leaving the S Feb 95 Calls naked. Cushion now at $19.26

  2. since it isn’t much more to BtO the Feb 90 Calls vs BtC the S 95 Calls that is what I did, at $4.50 on $NUS — let it ride

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  4. Interesting. I too am long Feb call options. With earnings Feb 6 and the Chinese regulatory bodies saying they want this resolved by the New Year (Feb 1), there is crazy long profit potential here with limited downside risk. Don’t see why an earnings beat + no disciplinary action taken by authorities couldn’t pop NUS to 120+ by expiration (Feb 21).

  5. I would certainly expect to see continued volatility but don’t see a recovery quite like you.

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