Anatomy of a Trade: Learn From Our Mistakes

The right thesis, but the wrong execution.

InnerWorkings had a tough Wednesday last week.

They lowered their guidance, primarily due to the loss of a large customer.  Their shares fell from $14.03/share to 10.48/share.  Seeing that their largest customer was about 8% of revenues, we thought it was time to leap.  We bought in at $10.52 on Thursday expecting a pop over the next couple of days.  And then . . .

The stock dropped at the open before we bought in.  Once we bought in, it hung in there and then started to drop.  We sold off at $10.45 in a panic sale.

So, how was our analysis?  INWK closed at $11.61 today.  Instead of sticking to our guns, we realized a 0.7% loss instead of a 10.4% gain (as of today).  We probably would have cashed out earlier as the intraday dips would have triggered trailing stop orders.  However, poor execution led to a loss instead of a big gain over a short period of time.

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