June 2, 2020

Why We Manage Risk the Way That We Do

Shares of Ulta Beauty tanked more than 20% after the company reported earnings after the bell Thursday that missed analysts’ expectations and slashed its outlook for the fiscal year.

The company said that the cosmetics industry has struggled as a whole this cycle, because there haven’t been innovative beauty routines that drive consumers to purchase products as much as they normally do. CEO Mary Dillon said she believes industrywide challenges will continue in the near term, leading the company to lower its earnings and revenue growth guidance.

Source:  CNBC

We had a play on for earnings in ULTA and it did not go as planned.  That happens in trading and specifically why we DEFINE and LIMIT our risk.

Click the video below to see the full analysis.

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about the author:

Scott Bauer

A respected market commentator seen on Bloomberg, Fox Business, CNBC and other major financial networks, Scott Bauer has 30+ years of professional equity and index options experience at the Chicago Board Options Exchange (CBOE) and Chicago Mercantile Exchange (CME) and as a Vice-President/trader for Goldman Sachs. Scott graduated with Honors from the University of Illinois Business School and has taught classes both at his alma mater and at the CBOE.

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