Our Biggest Win of 2025 Was a Bearish Bet in a Wild Bull Market?

Would you believe me if I told you that in this incredible bull market we've been in, my largest winning trade of the year—so far—was a bearish trade?

I entered it on August 15th and exited at the open this morning.

You'd be confused, right? I certainly am.

But this bearish bet in Simply Good Foods $SMPL is proof that we never know where the alpha is going to come from:

This is why we take each signal as it comes—on its own merits. I hate when people say this, but it's true:

It's a market of stocks, not a "stock market."

Sure, stocks are often correlated and can move together. But it's not a rule that they must. This is why we need to stay open to any possibility.

Had I ignored this trade setup because "we're in a bull market and I only want to be long," I would've missed out on a 1,234% return on my invested capital. That's double the return of my next best winner in 2025.

Let that sink in for a moment.

My biggest winner—by a factor of two—came from a bearish position in the middle of one of the strongest bull markets we've seen in years.

This isn't about being contrarian for the sake of it. It's about recognizing when an individual setup has merit, regardless of what the broader market is doing. Sometimes the best opportunities hide in plain sight, moving opposite to the prevailing trend.

The lesson here isn't complicated: don't let your market bias blind you to legitimate trading opportunities. Yes, bull markets favor long positions. But that doesn't mean every stock participates, and it certainly doesn't mean bearish setups can't work beautifully.

When you see a technically sound setup with proper risk management parameters, take it. Even if it goes against the narrative everyone else is following.

Today's market environment rewards flexibility. The traders who insist on only playing one direction—even when that direction is working most of the time—leave money on the table when exceptions present themselves.

SMPL was one of those exceptions. And I'm grateful I didn't let my bull market bias talk me out of the trade.

 Sean McLaughlin | Chief Options Strategist, All Star Charts