I Picked the Wrong Stock but Still Made 200% Overnight on Urban Outfitters Stock
Let’s begin today with a good news / bad news situation…
Bad news first.
Yesterday in The War Room, I floated the idea of playing a call spread on Salesforce (NYSE: CRM).
But then, I decided to pass on making the trade.
In retrospect, that was a terrible idea.
Salesforce reported strong earnings – and gapped up over $30 in this morning’s pre-market trading.
The call spread, which I passed on, would’ve absolutely crushed it today – maxing out to a huge overnight winner.
But luckily, we also have good news…
You see, in place of Salesforce, I decided to make a trade on Urban Outfitters (Nasdaq: URBN).
You’ve probably seen its retail stores.
The company basically takes what you’d have sitting up in your attic collecting dust, marks it up three times the price, calls it “vintage” and sells in high net worth shopping malls across the country.
Going into its earnings report, Urban Outfitters had a high short interest of around 12%. This set up for a potential “short squeeze,” which is one of the most powerful events in all of Wall Street.
Here’s what happened…
Urban Outfitters surprised Wall Street by reporting earnings of $34 million ($0.35 per share), which came in well above analyst expectations of a loss of $0.40 per share.
As a result, analysts rushed to upgrade the stock, which triggered the short-squeeze impact that pushed shares even higher.
You see, when you’re short a stock – and it’s moving against you – you cover your position very quickly. In doing so, you just add to the buying, which extends the upside move even higher.
In The War Room, members entered a call and put combo yesterday for $1.80. And this morning, they sold it for well above $5. It was a gain of 200% overnight.
And remember, that overnight gain came even when I picked the wrong stock!
Luckily, War Room members didn’t care. Here’s what a few of them said…
“URBN, in at $0.98 out $4.20. WOW.” – Gary C.
“In $0.96 Call; expired Put order! Out at $4.85 = 505%!!” – Mal
“Good morning Bryan! 110%… nice way to start a day! Thanks! – New member Raymond G.
“In at $1.84; out at $4.25. Gotta luv it!” – Ruby
“URBN: 10 calls in at $2.02 and sold at $4.55. 125% gain for a total profit of $2,600.” – Sterno
Action Plan: Do you want to start hitting these huge overnight winners? Then you’re invited to join me in The War Room today! In fact, I just might play another overnight earnings trade for tomorrow. If you want to jump into this trade alongside us, then you have to be part of The War Room!
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About Bryan Bottarelli
Bryan graduated with a business degree from the highly rated Indiana University Kelley School of Business, and his first job out of college was trading stock options on the floor of the Chicago Board Options Exchange. He was mentored by some of the country’s top floor traders in the heart of the technology boom from 1999 to 2000, where he learned to identify and implement some of his most powerful trading secrets. Now he shares his secrets with a group of elite traders. We will be republishing some of his highly sought after content from his free e-letter, Trade of the Day.