Anyways, my big short so far this year has been OpenTable (OPEN). A once darling momentum stock that really, doesn't has a business model that is immune to fierce competition. I shorted the stock back in the summer at 80.70, and after a brief move to almost 90, it's been in a free-fall since. It touched under 40 before the October rally took it back to the 51+ area just 5 days ago. It's deteriorated the last week and was trading at 43 today.
I was going to take the rational, safe, and smart route of cover the short today prior to earnings being released after the bell. But, I held off after looking at the chart and figuring that at most it would rally $5-6 on a great report. This is where my gambling and trading mentality collided. I was taking a 50/50 bet that the stock either rally hard or sell off. Although good odds, I would never walk up to a roulette table in Vegas and throw down that kind of money on red or black and hope for the best...but that's what I did today. My only real rational was I was already "up" by 37pts., so I could afford a loss of 5 to let it ride. But I shouldn't have considered at all where the stock came from, but where it was now---I would never buy a stock going into earnings with the chance to loss that much on one announcement, but my today I broke that rule.
Well after getting home from practice and checking the press release and after hours trades, the stock is down almost 15% after hours (~$6.40). The feeling was like I hit my number playing craps on got paid. A great feeling, but really it's not how I should be going about my trades. But you know what? Today, it feels great to be a gambler...and maybe I'll just close out the trade tomorrow and buy a iPad with my winnings!
