For those who are unfamiliar with this term, I am borrowing it from the US military. It is an exercise where after a mission the team reviews what went right and what went wrong with the intent on improving and getting better. Here is mine for this weeks $MCD
What did we expect to happen?:
Well this one is easy.. I was expecting a pop from $MCD
on earnings based on my thesis
I posted at the beginning of the week.
What actually happened?:
did in fact beat by a mile and my thesis was pretty accurate. I was expecting that people would trade down to their food as it is relatively cheaper in this environment of food inflation. I also suspected their digital presence would drive sales and revenue, which it did. However, as with many things in life it is all about timing. $MCD
dipped pretty hard into earnings putting my $305 calls under water. I added to them to drag my basis down but ultimately I found myself behind the 8 ball. I have trimmed my position down as close to break even as I can and have the remaining position set to sell at limit orders to hopefully make up for any losses on the first tranche I sold already. I will let these ride for a week or two and see if the limit orders hit.
What went wrong?:
I was excited for the quarter and felt it would be strong. Despite this being factually true, the market had general headwinds like the FED and the DOW had been a little too hot and was due for a pull back. As I mentioned before, I got in too early for an earnings play it seems. In my defense, nobody knows what will happen tomorrow so I got in and averaged down but I should have paid up in premium for perhaps more time and to be closer to in the money.
What went right?:
My thesis was directionally correct and $MCD
did pop. Just not as much as I had hoped. I survived to trade another day and have exited most of the position and can redeploy to another trade. Also, I was fortunate to limit my exposure. I only have one account that I can trade options in and it is my smallest account. So, wins are great but losses are mitigated and do not derail my life. I intentionally do not have options approved in my IRA's etc. and force myself to stick to the slow and steady growth approach.
I didn't take home a big win but I also didn't lose the farm. This reminds me of how you can be right and wrong at the same time.. a memo I wrote a while ago but is worth checking out if you haven't found yourself in this type of situation. Here is that post if you are interested!