Sell Alert: The Buckle (BKE)
TRADE INSTRUCTIONS
Date: December 13, 2016
Name: The Buckle, Inc.
Symbol: BKE
Type: Close
Limit: Sell at market
TRADE RATIONALE
As I mentioned in last week’s alert, The Buckle (BKE) was trading well above its 50DMA and near its top Bollinger Band so I raised its stop level to $25.00, which it closed below yesterday so I am now closing out this position. We opened this position five weeks ago ago at an entry price of $22.65, so even though we are selling it short of our target price of $28.00 we will still achieve an annualized return in excess of 100% at today’s opening price. That makes for four consecutive winning trades, with three of them in excess of 100% on annualized basis so we are on a roll! I know some of you played this with options and did considerably better than that, and were kind enough to share your strategies with others who hopefully did the same. On to the next one!
Stock Talk
black arrow
I could see things were dropping overall yesterday, so I put on my sell hat and sold BKE yesterday.
Thanks for another profitable trade, Jim.
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Larry Johnson
I got stopped out yesterday.
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Maria R
Thanks. sold BKE for 24,751@ Schwab
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Karen Williamson
Has anyone stopped out on DELPHI yet? I stopped out today @ 69.oo
Dramatic License
I closed it out a little over 71 I think, but it’s coming back again today.
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Ado Casagrande
i got stoped out at 25.05 not bad for a beginner.. thanx for everything MERRY CHRISTMAS
Jim Pearce
And I hope you made some decent money on that trade so you can buy yourself a nice present! 🙂
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Roger Hill
Sold BKE170317C22.5 for $2.88 for a 33 day return of 12.27%.
Thanks, Jim
Jim Pearce
You’re welcome. I’ll take that type of return every time; hard to beat a 135% gain on an annualized basis. Good work!
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black arrow
May seem fundamental, but can you give us the formula for an annualized return or direct us where it is listed please?
Jim Pearce
[(exit price – entry price)/entry price] * (365/days held).
Dramatic License
Jim, this is how I have been doing it myself. However, I came across a seemingly more complex way of calculating it. Are there multiple formulas used in calculating annualized returns?
Jim Pearce
There are, depending on how you want to treat the compounding of returns, if at all (which my formula does not; its simply a straight line extrapolation).
Dramatic License
Thanks, Jim. I do think the other formula I came across had compounding figured in also. I’m fine with the straightforward method and it’s what I’ve been using.
Jim Pearce
Compounding has the effect of exaggerating the return, which is why I don’t use it. For example, if you earned a 10% return over 36 days that would equate to a 100% annualized return. However, if we compounded that return for ten separate 36-day holding periods the annualized gain is closer to 150%. But since we advocate putting a fixed dollar amount into each position, I feel the straight-line approach is more accurate.
Dramatic License
Ah, thanks for clarifying that. That’s helpful.
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Dramatic License
Looking back through some past trades and current prices, there’s a reason we have stop losses. BKE and KORS down a lot from where we exited. Glad to see a loss sometimes prevents a huge loss. 🙂
Dramatic License
…or in this case a small gain prevented a big loss!
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