No Regrets

One might look at Universal Display (PANL) and not like my trade. I was long the shares and nervous into earnings. I had no issue giving up half of the upside move so that I could sleep last night. It is a tradeoff. My cost basis for PANL is $25.71 and my hedge, which is long the March $27 put and $26 put while being short 3 March $23 puts for $1.60 had a break-even cost at $25.70. From $25.70 to $23, I was actually over-hedged against my long shares by a 2-to-1 margin. But below $23, I not only became long my 100 shares again, but also long another 100 shares; however, I would have saved myself $2.70 worth of pain, or roughly 10%. For me, that was worth it.

So PANL is up some $3.20 today and I'm only seeing $1.60 of it on the bottom line --assuming my puts expire worthless and I do nothing with them. Those are the choices an investor often has to be prepared to make. I'd love to have the other $1.60 on the move higher now, but I don't regret the trade at all....228 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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