Wednesday, July 25, 2012

PNRA trade follow up

Sometimes you eat the bread, sometimes the bread eats you!
PNRA reported positive earnings last nite and the stock responded with an after hours move of + 8%. This morning it is trading 152ish. Clearly Panera is eating CMG's lunch. This effectively negates our butterfly finishing in the money barring a European disaster over the next three trading days. We will take a look at trade repair after the opening though there likely won't be much to do without initiating new risk. This looks to be just a trade that didn't work. And is a prime example of why trading is not just about picking direction correctly. Money management is imperative. Risking 1% of equity on an idea allows us to be dead wrong and not blow up the house. We could be wrong on 6 of these trades (6.5/1 risk reward)befoe we are right and still be ahead of the game. Of course, we are aimimg for better than 50% which will provide a nice total return on the portfolio. 
I'll check back in around 10AM with any thoughts.

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