‘Sweet’ Trade, Two Exits

Hey 5-Star Trader,

“Tuesday Trade” Journal: One of the most important concepts in trading is to review your work, and learn from the good and the bad. Identifying what is working is critical — to do more of it. So, to lead by example, each Tuesday, you’ll get a trade from my trading journal, in which I explain my thought process from start to finish. Trading is all about finding something that works, and applying it over and over again. That’s how you find trading success. So study up on this “Tuesday Trade” and let’s get to work.

Today I want to outline my trade in Hershey (HSY).

Like most traders, I have a list of “favorite” tickers I love to trade. Many of you know Chewy (CHWY) is one of my all-time favorites! And while my list of “go-to” tickers continues to grow, HSY is not one I dabble with often. However, while searching through the market on July 6 I saw the HSY daily squeeze and knew I had to buy. 

I decided to buy five butterflies with a target of $180 ㅡ BUY +5 BUTTERFLY HSY 100 16 JUL 21 175/180/185 CALL @1.13 limit order (LMT).

This was a low-cost butterfly which allowed me to buy multiple contracts, but it was bullish in nature and I risked the full $500  amount.

Pictured below is my HSY chart. This shows the VZO buy signal along with its squeeze and nice, solid trend.

Pictured below is my butterfly options chain:

One week after opening the trade, HSY was still looking good. Playing on the cautionary side, I decided to sell three out of my five butterflies ㅡ SELL -3 BUTTERFLY HSY 100 16 JUL 21 175/180/185 CALL @1.02 LMT.

I did this because even though I was still in the green, I didn’t want to lose too much value in the last few days prior to expiration. By selling those contracts I was able to remain in the trade for more potential upside movement while mitigating my risk and cashing in some profit.

The very next day I got out of HSY taking a double on my remaining two contracts ㅡ SELL -2 BUTTERFLY HSY 100 16 JUL 21 175/180/185 CALL @2.62 LMT. 

Interested in what stocks Danielle is buying? Join her free webinar, the “24/hr Stocks Growth Formula.” There Danielle will show you how she beats financial “advisors” and takes control of long-term investments!

Up Next...

Trade Review: Using a Neutral 0 DTE SPX Strategy

  In today’s Trade Review episode, I cover a quick SPX 0 DTE trade from last Friday at market close. In this video review, I cover: Why I decided to make a bet that the market would trade sideways into the close How I analyzed the options chain and technical chart patterns Why I decided … Read more

Read More

Butterflies + Put Credit Spreads Combined

A Bullish Earnings Call Last week, in the trading room, one of our members requested that I analyze the ticker AAP. This ticker belongs to Applovin, a company I’ve never traded before. This find is a prime example of the collaborative aspect of the trading room, and it’s why I appreciate our dedicated traders so … Read more

Read More

Walmart: Earnings in Focus

Walmart Earnings: May 16th Walmart is reporting earnings on Thursday, May 16th, before the bell. This is one of the most important earnings reports this week because it will show investors how the largest retailer in the United States and the world is faring. Between high inflation, consumer sentiment, and behavior, various factors could impact … Read more

Read More

Subscribe Today!

Want my up-to-date analysis, setups, top trading tips, and more? Be a Five Star trader, and join my free newsletter today!

Sign Up Now