{"id":39450,"date":"2014-12-01T10:55:26","date_gmt":"2014-12-01T15:55:26","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=39450"},"modified":"2023-04-10T16:45:27","modified_gmt":"2023-04-10T20:45:27","slug":"trade-with-distinction-in-best-buy","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/trade-with-distinction-in-best-buy","title":{"rendered":"Trade with Distinction in Best Buy"},"content":{"rendered":"<p>&nbsp;<\/p>\n<p>I love to short stocks whose margins are under pressure.\u00a0 This is a news catalyst that can bring new selling and shorting.<\/p>\n<p>Margins are how much a company makes on the product they sell.\u00a0 If they make less per item then their core business will become weaker generally.\u00a0 The only way to offset this is with increased volume.\u00a0 But absent a note that their sales gross revenue is increasing, stocks usually find weakness.\u00a0 We saw a possible example in BBY today, with the note below on our SMB Scanner.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-39451 size-full\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/12\/BBY.png\" alt=\"BBY\" width=\"620\" height=\"105\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/12\/BBY.png 620w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/12\/BBY-300x50.png 300w\" sizes=\"auto, (max-width: 620px) 100vw, 620px\" \/><\/p>\n<p>I like to see the markets as trading patterns.\u00a0 I should love this short trade right?\u00a0 Not quite.\u00a0 I am short.\u00a0 I do like the short.\u00a0 But I do not love it and it is important to point out why.<\/p>\n<p>Usually I short stocks when the company has announced weaker margins.\u00a0 Look carefully, as that is not the pattern here.\u00a0 An analyst at Wedbush is warning that margin compression is likely in BBY.\u00a0 This is the opinion of one analyst and not yet fact.\u00a0 This is NOT the same thing as margins are compressed.<\/p>\n<p>I found a nice spot to short BBY against VWAP (37.80ish).\u00a0 I will lean short until it trades above 38 or I see the end of my short.\u00a0 But I will not be as big.\u00a0 This is not an A+ trade for me.\u00a0 And this is all because the news catalyst is not quite the same.<\/p>\n<p>Trade with distinction!<\/p>\n<p>$Short $BBY<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-39456\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/12\/BBY2.png\" alt=\"BBY\" width=\"537\" height=\"424\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/12\/BBY2.png 1027w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/12\/BBY2-300x236.png 300w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/12\/BBY2-1024x808.png 1024w\" sizes=\"auto, (max-width: 537px) 100vw, 537px\" \/><br \/>\nMike Bellafiore is the Co-Founder of SMB Capital and SMBU, which provides trading education in stocks, and options. Bella is the author of<em> One Good Trade<\/em> and <em>The PlayBook<\/em>. He welcomes your trading questions at mbellafiore@smbcap.com.<\/p>\n<p><a href=\"https:\/\/www.smbtraining.com\/blog\/daily-vid\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter  wp-image-39307\" src=\"http:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/11\/10daybanner.png\" alt=\"10daybanner\" width=\"434\" height=\"215\" srcset=\"\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/11\/10daybanner.png 586w, \/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/11\/10daybanner-300x148.png 300w\" sizes=\"auto, (max-width: 434px) 100vw, 434px\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; I love to short stocks whose margins are under pressure.\u00a0 This is a news catalyst that can bring new selling and shorting. Margins are how much a company makes on the product they sell.\u00a0 If they make less per item then their core business will become weaker generally.\u00a0 The only way to offset this is with increased volume.\u00a0 But &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/trade-with-distinction-in-best-buy\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":39451,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[1110,3332,55],"class_list":["post-39450","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-comments-2","tag-buy","tag-distinction","tag-trade"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Trade with Distinction in Best Buy | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/trade-with-distinction-in-best-buy\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Trade with Distinction in Best Buy | SMB Training\" \/>\n<meta property=\"og:description\" content=\"&nbsp; I love to short stocks whose margins are under pressure.\u00a0 This is a news catalyst that can bring new selling and shorting. Margins are how much a company makes on the product they sell.\u00a0 If they make less per item then their core business will become weaker generally.\u00a0 The only way to offset this is with increased volume.\u00a0 But ... Read More\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.smbtraining.com\/blog\/trade-with-distinction-in-best-buy\" \/>\n<meta property=\"og:site_name\" content=\"SMB Training Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/smbcap\/\" \/>\n<meta property=\"article:published_time\" content=\"2014-12-01T15:55:26+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-04-10T20:45:27+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2014\/12\/BBY.png\" \/>\n\t<meta property=\"og:image:width\" content=\"620\" \/>\n\t<meta property=\"og:image:height\" content=\"105\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Bella\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@smbcapital\" \/>\n<meta name=\"twitter:site\" content=\"@smbcapital\" \/>\n<meta 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