Considering it’s officially Valentine’s Day, what better topic is there than jewelry? This inspired me to write about my short sell of $TIF a few weeks ago.
I love Tiffany & Co (TIF) jewelry, and I love their company’s tasteful profile even more. This didn’t, however, stop me from shorting the stock a few weeks ago before close and buying to cover Friday at open. I mentioned this on the CNBC Interview that I did last week.I love when my trading on the cusp strategy brings me high profits.
What is “Trading on the Cusp”?
Trading on the Cusp is where you place your entrance trade right before the day’s close and your exit trade right after the following day’s open.
It’s all about profiting off of the stocks price jump that occurs over night. It’s a stress free strategy because you can’t watch how the stocks price changes after the market closes. When I trade intraday, it is more stressful because I can watch the stock price every second and sometimes will exit a trade quicker than I should have based on an impulse.
Occasionally, there isn’t too much of a jump; but other times there is a nice jump to profit from.
My short sell on $TIF made me the greatest profit ever from an overnight jump. Take a look at the chart below to see my approach:
The price I shorted at was $63.12, and the price at which I bought to cover was $59.49.
How do you know when to Trade on the Cusp?
What was it that caused this ridiculous drop? I knew to short it firstly because it was highly oversold and I could sense a drop coming. But the main reason for the drop was due to the company lowering their expectations for their Q4 earnings report. It’s not even their actual earnings report…just the earnings outlook.
My goodness. These stocks and their prices are more susceptible to price swings than I thought. The earnings season mine field is filled with more bombs than I thought. Beware of not only the earnings report release date, but also the unknown earning outlooks that get released during earnings season.
Most importantly, trade on your instincts, Trade on the Cusp, and many happy returns!