Exits Completed: Red Hat

Sold Red Hat, completing my roundtrip with about my commission lost. Stupidly, I had made two initial purchase orders, tacking on another $7 unnecessarily.

It didn't move much more than its initial spike so I think I sold at a loss of $19 or some such.

Berkshire made a big move, my trailing stop is still in effect and that should lock in a tiny profit.

Looking for some new things to play with. We'll see what happens with Berkshire on Monday.

Exits all around... (RHT, BRK/B, V)

Red Hat, Inc. (RHT)
As I feared, Red Hat is a bit too low in volume to really push past a 5% gain. I bought pretty much at market open, and pretty much at its peak thus far of $18.58 and worse still, after it had made its biggest move in after hours yesterday. It's showing strong resistance at $18.80-ish, and I don't think we'll see it move past that. Trailing stop set: 57 @ 1% / $18.4734.

Berkshire Hathaway (BRK/B)
Berkshire is having it's daily spike up, as high as $4,450 when I started writing this. It's at $4,432, with me having bought in at $4,374.50. Trailing stop set: 1 @ 1% / $4,393.55, guaranteed profit of all of $20. (After commission.) Hopefully we can squeeze out just a little more, but I want some big liquidity back. I'll probably keep my eye on it and watch for it to fall to $4,200 to buy in again. It's moving up almost no matter what; buying on the dip of the range is a good call.

Visa (V)
This stock just won't settle down. Everyone expects it to perform exactly like Mastercard—to take off and break out in the next couple of months and skyrocket into the $200s. It took MA four months to move and MA had a lackluster first few months at best, opening at $44 like V, and only hitting the $50s until month 4, when it broke out in a big way:


In the meantime, nothing's moving on it and today, it's taking a bit of a hit, trending downwards and unable to gain any ground on its rallies. We'll see where it lands. Trailing stop set: 35 @ 5% / $60.268

Let's play the earnings call game... Buying Redhat (RHT)

Redhat announced that they bested earnings expectations by 7%. Quarterly earnings calls almost always come with a fun shift in the stock price: up for beat expectations, down for missed expectations. Naturally, this is an oversimplification. A stock's last few quarter's performance, it's market capitalization, the amount by which it missed or exceeded and of course, random market entropy all come into play.

But it's typically one of the safer bets you can make.

I'm hoping for a 5-10% bump and I'll roundtrip it if it gets anywhere near to that. After hours pushed +1.27 / 7.24% already, so the most of what we'll see may have already come and I could be buying into a sell off. Or we could see some shorts covered and a nice spike that nets me a small profit.

I'm only buying $1,000 worth, since that's all I have in "liquidity". In fact, I don't even have that; I have $500 in settled funds and another $500 in unsettled, pending funds. (From today's GOOG & AAPL sales.) The Federal Reserve's Regulation T requires me to have the funds settled before I can buy and then sell a new set of securities with the proceeds of an earlier sale.

Example: While I can buy 29 shares of RHT with the proceeds from my GOOG/AAPL sales, I cannot sell the position until the sales have settled, in three days. If I do, it's considered "free-riding" and it's a no-no; two instances locks an account for 90 days. I'm willing to take one instance to get a nice profit in.

I'm also completing a margin application, since you can get around this provision with a margin account.

The other thing I need to watch out for is the pattern day trading rules. If I perform 4 roundtrips (in and out of a position in the same day) within any 5 day period, my account converts to a "pattern day trader" account, which requires a minimum equity amount of $25,000. The punchline? They issue a fucking trading equity call for the difference if you don't have the $25,000. Or they close your account. Woo regulations.