Trade Review: $AMZN Short

Just a quick review of a short trade that I closed on $AMZN from last week to today. I wasn’t planning to make it so short, but since I was using options and I got a fairly substantial move in one day, I decided to lock in the profits. I’ve continuously made the greedy decision to hold on to my option trades too long resulting in over thinking exit strategies and many trades turning from profitable to a loss due to option price decay. The following screenshots provide a summary of the trade.

I’m actually quite happy with how I executed this trade. I was looking to trade this short mainly because of how much it had risen over the past few weeks and it was starting to get quite over extended.

Purchased my PUT on the pull back from the failed breakout and when it broke the intraday VWAP. Held it over the weekend due to the weak close. When I got the gap I wanted, I first moved my stop to make it a “no-loss” trade.

With a little bit of luck, we got an excellent day of selling. The amount it dropped was faster than I expected. As I checked in throughout the day, I modified my stop to the latest VWAP price. I was originally going to hold this for multiple days, but changed my mind when I saw that it had dropped almost to 1600 (my target price) and it was approaching the last hour of trading. With how far it had dropped, I felt the probability of a last hour reversal was more likely than another hour of lower prices.

Worked out okay as it had a small bounce into the close. It could very well continue going down over the next few days, but I’m quite content with how quickly I locked these gains and you can never complain about making profit.

As long as I can keep this type of consistency and mindful trading, I should have a much better than year than last year.