Carving Out a Pair of Earnings Plays

Many traders like to hedge their positions. Hedge fund managers have it in their job title. This can often be a good thing -- but for writers, well, not so much. I would avoid financial writers and bloggers who hedge their own writing. If their position or stance isn't clear, or if you feel as though you are reading a lot of double talk, then walk away.

Yet it is important to understand what hedging your own words entails, as well. For instance, when I wrote about Cirrus Logic (CRUS) Wednesday, I said was a bit confounded because the chart was bullish to me, and yet my view was bearish. My call was a bearish, which I normally wouldn't have had in the face of a bullish chart, and I felt I needed to sit out the trade or run with a straddle type of position. In the end I did go through with the straddle, but this doesn't constitute hedging my words. I explained my thought process and then went with a trade, which was long volatility. Yes, I should have hung with the original ratio put spread, as it would have done much better than the straddle, but that is simply hindsight. I made a definitive trade, which I have since exited, and I moved on....444 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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