Friday, May 14, 2010
Out of MS... Into BCS!
I put my TETSOB aside and called it a play with MS, getting out just now at about $27. Options are not looking good today and if Gold-diggers Suck was any example, this could become a long and drawn out affair. I should not have gotten greedy, but I was looking to play a retest of the $35 level. Options In, Options Out!
I used the proceeds to get into Barclays (BCS). This could potentially work out really well for me over the longer term. First, I got more shares out of BCS than staying in MS. Next, it's no secret that I'm into GBP/USD. If GBP/USD goes up like I think it will, this will affect BCS in dollar terms. It'll be worth more dollars over the longer term. Together with the share appreciation I anticipate on BCS, this is total Trend On Trend Material!
Based on options chains analysis, BCS might still get to $17 again, but I did not want to wait and if I get plucked for $1, that'll be fine by me because the risk:reward is just too good to resist and I just had to touch BCS at that level.
I should have sold MS last week and gotten into BCS when it got to $16 something, but I was emotionally volatile.
I guess I still am, but I'm taking action. Shoot first, think later. LOL. Hopefully, I haven't shot myself in the foot yet again.
In terms of risk:reward...
MS at $35 would have been about a 33% gain minus commissions.
BCS at $25.68 would be about a 42% gain minus commissions.
Subscribe to:
Post Comments (Atom)
1 comment:
I think I see where you're going with that comment, although I would have liked to think of it as something like... from Fraidy Cat to Tigress - that sort of thing. Someone once told me: "it's better to be a poor man's wife than a rich man's mistress." Who knows? Judging from today's action, I've just become the poor man's mistress with BCS. Trading discipline... I've got a lack of it. However, GBP/USD made a lower low today than it did about a week and a half back, when BCS was around the $16 something level. This tells me that I could be on the right track for once. If BCS is higher today with a lower GBP/USD rate, this signals to me that the market has potentially mispriced one of these assets - potentially even both.
Post a Comment