11:10 am (EST)

Leave it to Barron’s to ruin another one of our trades. Amazon.com (AMZN, $76.17, down $2.00) was mentioned in this weekend’s online edition and although the investment magazine said a lot of good things about the company, the stock is down over 2% this morning.

We got out on half of the April 80 calls (ZQNDP, $1.50, down $0.85) on Friday at $2.35 and our stop of $1.90 on the other half was hit at the open. The stop was set at $1.90 but the call options actually opened at $1.86 this morning.

As you can see, stops are so important when protecting profits and they are so easy to set. If you didn’t set a stop, you have seen these calls steadily decline from $1.85 to $1.50 which means you have lost money.

Amazon.com could resume its uptrend but we have already made our gains. We were in at 90 cents and if you closed half on Friday, you made 160%. You made over 100% on the other half if you had your stops in. I cannot stress the importance of using stops and how they help maximize your gains and limit your losses.

Rick Rouse