$110 profit in DKS
Happy Sunday!
You might have read that I try to avoid holding trades through earnings, but I'm quite happy to enter them right after, and this trade in DKS demonstrates why.
This week:
$110 profit in Dick's Sporting Goods (DKS)
$110 profit in DKS
The market reacted terribly to DKS's last earnings report. The stock dropped from nearly $180 to just over $124.
This large drop inflated option prices, which meant a great opportunity for entering a new position.
That said, no one knows how long a stock will continue to drop after such a big move, so I issued this trade as a bonus trade, just to indicate an extra layer of caution around the trade.
I sold the Sep 18 $125 cash-secured put for $2.10 credit.
While I wasn't banking on a bounce, I wanted to take advantage of any possible bounce which would allow me to close the position early for a profit. This influenced my decision to go for the shorter-term Sep expiration instead of the Oct expiration.
As it turned out, a bounce is what DKS got and within 5 days I could pay $1.00 to close the trade, leading to $110 in realized profit.
When a trade works out nicely in the first few days, the tendency is sometimes to see how far it can go. The way I see it is that this was a very opportunistic trade and DKS could continue to drop, so if I'm gifted more than 50% profit in just a week, I'm taking it.
This is winning trade #7 of 7 in DKS, with a running realized profit tally of $1,340 just in this one stock so far in 2026.
This trade (and all trades in this newsletter) are shared in close-to real time to my private community as updates in my own portfolio (not recommendations). If you're familiar with the basic mechanics of options, you can consider joining the private community to view these updates as well.
And of course the guidance for managing and closing both trades were posted to the community as well.
You can find out more about my private community at the link below.
Have a good weekend!
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This article is for educational purposes only. This is my own portfolio which is being managed according to my goals and risk tolerance. Your situation is likely different and you should do your own due diligence before investing in stocks or options.
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