Pinch Hitting starring Insmed

This morning in pre-market action I participated in a bounce trade on $INSM. This stock was down as much as 35% at one point – but has recovered nicely. One of the key elements in my trading is the use of Options so I wanted to made an adjustment in that direction once the market opened. Why? Here’s why:

I wanted to protect the $3+ gain on the stock trade and still participate on the long side if it continued to recover

One way to accomplish this is to do a “pinch hitter” trade. I sold the stock and went to using Options:

INSMThe goals here are simple:

1) Book the gains on the stock trade

2) Make it MUCH easier to continue to participate on the long side

3) Reduce risk in a BIG way. The cost of the Call Spread is now all that is at risk

 

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