DailyPlay – Closing Trade (PDD) – June 27, 2024

Investment Rationale

In light of AMZN’s announcement for plans to create a direct low-cost channel with Chinese goods to counter PDD’s Temu, we should consider cutting losses on our PDD trade despite not triggering our stop loss levels. This is an example where the fundamentals changed after we entered a trade and the original thesis is no longer valid. When this happens it is best to cut losses when they are still small and move on instead of waiting and hoping. 

Closing Trade

• PDD – 47.69% loss: Buy to Close 4 Contracts (or 100% of your Contracts) August 2nd $143/$135 Put Vertical Spreads @ $4.15 Debit. DailyPlay Portfolio: By Closing all 4 Contract, we will be paying $1,660 We opened these 4 Contract on June 24 @ $2.81 Credit. Our average loss, therefore, is $134 per contract.