How I Traded The Uber IPO For A Profit

IPOs are some of the most exciting events on Wall Street. Unfortunately, I find them very difficult to trade consistently for a profit.

Not only do they move extremely quickly, but many IPOs end up selling off after their initial pop before eventually moving higher. As a day trader, I don’t have the patience to wait that long. IPOs are also rarely shortable immediately, which can mess with the stock’s movement in the near-term.

The Uber Technologies Inc UBER IPO on Friday was the largest public offering of the year, and volume was predictably high. Uber didn’t open for trading until 11:50 am ET, and by 12:02 71 million shares had traded.

All that being said, I was interested in participating, if only for a quick scalp trade. The first thing I did was limit my size—from 3,000 to 1,000—because of the added volatility. Then I set out looking for obvious places to be a buyer.

With the stock opening below its IPO price at $42, the first level that jumped out to me was $42.78 as a pivot point. So I placed an order at $42.74 while looking for the stock to break above $43.

Once the stock moved up to $43, which had been a temporary resistance level to that point, I sold half my position just to be safe. My goal was to wait and see if it would move into the $43 handle, which it did moments later. As soon as that happened, I sold the rest of my position in two trades with the stock trading above $43.

All told this trade netted me a $900, though it was far from my greatest trade ever. UBER ended up moving $0.30 higher, so I could have held it for a few moments longer and made a little more profit. But I decided to make a quick exit and call it a day.

Every single day you’re either leaving money on the table or you’re giving back profit. In this case it was the former, and that’s fine by me.