Friday, May 31, 2013
Market Makers?? I'm going to hold on tight and get through this fight!
-4.53% Roth IRA
-2.25% SENSEX (Maharajas??)
-0.41% Hang Seng
+1.88% 10-Year US Treasury Notes
If corn marches towards its 52WH, I would be in the money with these calls!
Plus, if it only goes in that direction, I should be able to take profit...
I did a quick search and the Corn Belt was / could still be experiencing drought conditions, which could affect near-term harvests...
Net credit of $0.33...
If assigned, will buy at $24.59 and exercise $25.50 puts, which have been financed via put selling...
Thursday, May 30, 2013
I got only 3 hours of sleep last night as the Japanese Housewives once again knifed down big time! I figured the US stock market would sell off too and worried about how I don't have any more SPY puts left. For the first time in ForexDiva history, I did not blame myself and focused on how I can turn this thing around without getting dinged some more.
I woke up with a fresh perspective and searched for instances where I could sell a put and still have a backup plan if I should get assigned at the last minute. I've seen Mike Khouw do it enough that I should know by now how put spreads work. But somehow, I only paid attention half-heartedly - until today.
Perhaps these opportunities don't come around very often, but when they do, they could be really cool. I have to hang ten here and not get scared out of the trade by paper losses. The point is to wait until I get assigned (or not) and then throw down a Full House in the form of my SPY 165.50 puts that expire one week later. I hope I've got it right this time!
Shockingly, in spite of a Nikkei that fell -5.15% overnight, the US stock rally marched onwards and upwards, undeterred by weaker than expected Unemployment Claims and Pending Home Sales. Even my Japanese bank calls didn't get hit much, but my EWJ puts didn't pop much either.
The market has a blindspot, but who am I to judge?
+1.24% Roth IRA
-0.31% Hang Seng
00.00% 10-Year US Treasury Notes
I think I finally understand put spreads!
Net credit of $0.29...
1.If assigned, entry point would be 165.12, in which case I have 165.5 puts
2.If unassigned, I would bank $0.29 per share...
Wednesday, May 29, 2013
I was guilty of not knowing whether I made or lost money on my first SPY put vertical spread and boy was it a real economiss. Somehow, the 'credit' I collected confused me, but it turned out as soon as I got into the position, it had turned against me. I should know by now that there's no free lunch.
After another experience of jumping in front of a bulldozer to collect pennies, I think it's time to step away from the SPY for a while. It's been a loss-leader for me and if I want to get rid of losses, that's where I have to start. Good thing I was not approved for straddles! It looks like such a compelling position, but I must say I don't understand the risks.
I'll keep it simple from now on, but at the same time, I want to find out how money gets made with SPY vertical spreads. When does it work? Why didn't it work when I decided to jump on the bandwagon?
I kind of want to go away until Santa comes along, but I've still got a bunch of calls going on.
Believe it or not, I ended up with gains on my accounts after taking some losses, but I'm more concerned about increasing bankable gains and minimising haircuts. A day with bankable gains and a paper loss is preferable for me, but ideally, I'd like both bankable gains and paper gains please...
+0.15% Roth IRA
-1.61% Hang Seng
-0.52% 10-Year US Treasury Notes
Why am I doing this??
Haircut of $0.08...
Net credit of $0.40 - for now...
Don't want to risk getting assigned, so got into out of the money vertical call spread...
Don't ask... Don't tell...
Credit of $0.39 per share...
Closed Out SPY Put Spread: Sold SPY Jun 07 '13 $165 Puts @ $1.68 + Bought SPY Jun 07 '13 $166 Puts @ $2.20...
Was only able to hold onto 39% of credit from yesterday, netting $0.1386 per share...
Will try to hold onto more of the credit on next try!
Tuesday, May 28, 2013
Corn brought home the bacon for me today, but I'll still waiting for WEAT to turn up the heat...
I temporarily repatriated about 30% of my unrealised Japanese bank call losses by getting into some SPY vertical put spreads ($166 / $165 puts) at a credit of $0.35 per share - meaning I'm a buyer at $165.65 and a seller at $165.35. Before getting into the trade, I contemplated getting into SPY out of the money vertical call spreads, but decided that since the SPY sellers were so powerful, I'd go with them.
I'm still faced with growing % cash in a declining account on my Roth IRA and I need to turn this ship around and end up with growing % cash in a growing account.
How do I get there in the quickest possible way at minimal risk?
It's taking tremendous willpower to ignore all of the red in my portfolio right now...
-1.13% Roth IRA
+1.05% Hang Seng
+6.17% 10-Year US Treasury Notes... Whoa... is the 10-Year US Treasury Note the new VIX??
Net credit of $0.35 per share...
Was going to get into call spreads, but the trend is still up and the put sellers have been minting money.
Perhaps this is why there are so many Buy the Dippers - and I'm sort of joining them with this trade... Sort of!
Mike Khouw showed us how to make money using put spreads...
It sparked a new trading idea and I'm going to utilise it during my repatriation efforts!
Friday, May 24, 2013
I more or less had repatriated my recently expired SPY put losses and was starting to mint money with my calls. With a hit out of nowhere, I ended up being voted Economiss of the Week with a bunch of Japanese bank calls. I risked 30% of what I had invested value-wise in MFG and NMR shares during my Japanese Earthquake buying days on these calls.
I was about 2 years too early during the Japanese Earthquake as I sat through mounting paper losses, but it ended up being one of my most profitable trades ever. I think I even made more money on NMR and MFG than when I got into Citi shares at rock bottom prices during the Great Recession. Too bad I sold my NMR and MFG shares too early and ended up buying calls at what could be an intermediate market top.
I'm still sitting on 37% cash in my Roth IRA, but I don't want to go on a trading spree just yet because I'm still pretty emotional. Yeah, I should take a chill pill, but this was the moment I'd been trading for for months and I not only missed out, but lost money. It was a serious financial punch in the face...
How can I repatriate these losses and not end up getting more losses? I've been waiting for a market sell-off for months now and I wanted to use it to stock up on calls when the selling got overdone. With these Buy the Dippers in the way, it's really difficult for the market to sell off in a meaningful way. Why can't you all buy when the SPY gets to 140?
-3.75% Roth IRA (quite painful on this account, as it is substantially bigger than my SBA)
-0.23% Hang Seng
-0.59% 10-Year US Treasury Notes
Add them to Potentially Rising Unemployment Claims...
Politico: Furlough Friday - 4 Agencies Closed For Business...
The put sellers have presumably been funding other bullish plays in their portfolio - getting into dividend payers, perhaps - for several months now. When this all has to unravel, could the tumble match what we saw on the Nikkei yesterday?
I'm thinking of selling some puts myself - when puts on my Japanese banks get expensive enough...
That could be another repatriation strategy... maybe, sort of!
Oil production nationwide has been increasing, but increased production means more supply that can potentially overtake demand.
If this happens, oil prices will go down unless the suppliers artificially hold up prices with futures hedging - if they can do it successfully.
If VIX manages a definitive move to the upside, these puts may become more expensive based on the profit-taking alone, which would eventually make the higher strike puts too expensive and thus obsolete, then put the lower issues in focus...
Thursday, May 23, 2013
Overnight, my worries about the Nikkei dropping -7.32% turned into extensive plotting of how I can potentially turn the global market bloodbath into a profit-making opportunity for my portfolio. I stayed up researching and putting together a playlist comprising of:
EWV June $22 calls
EWJ June $12 puts
Things looked promising as gold logged a comeback and I figured my SLV calls might come into play too. I rang the imaginary cash register in my head several times as I had a few positions that the Market Makers could rig in my favour: SLV, SPY $164s, TVIX, UVXY, VXX, and some UVXY calls to boot. Then, the market opened and the day turned out to be heart-wrenchingly disappointing.
I might as well have slept through the entire day, as my Japanese bank calls didn't fall as much as anticipated and my SPY put gains slipped through my fingers and turned into open-mouth gasps and frustrating losses as the Buy the Dippers trumped the Sell the Rippers.
I seriously thought all my Japanese bank calls would go straight to zero today and put a -10% dent in my Roth IRA.
What's the point of hedging and being a semi-bear?
-2.67% Roth IRA
-2.54% Hang Seng
-0.15% 10-Year US Treasury Notes
Haircut of $0.35 per share, or -21.7%...
I swear... if the buy the dippers come back in, I'll have a fit!
Wednesday, May 22, 2013
Unfortunately, I joined the bull camp again at the wrong time. My equity took a dip today as BOJ failed to deliver more upside and Bernanke's testy testimony brought out the lurking call sellers. The money on the sidelines may just be looking for an opportune moment to sell the rips - not buy the dips.
Though I benefitted from the initial MRK $5 billion share buyback pop with some profit-taking, the new MRK calls I got into are swimming in MRK-y waters.
I took the bulls by the horn and got some AA and AMD calls off the table, then added some CORN, WEAT, DBA, and UVXY calls to my $164 and $158 SPY puts, which are still alive - maybe, sort of.
Let's do it, semi-bears! It's repatriation time...
-1.35% Roth IRA
-0.45% Hang Seng
+4.22% 10-Year US Treasury Notes
Could the Market Makers soon yell 'Get into Japan... Get into Japan!!'??
The US is about to end QE and Japan is just starting...
Tuesday, May 21, 2013
Hopefully, tomorrow will bring more profit-taking opportunities - or so says Mike Khouw, who should totally write a book...
But I kept my position alive as I have a new trading idea I want to try. Hopefully, I'm not one of the last people to convert to bullishism. Typically, when even the bears become bulls, that's a warning sign, but after reading several more of the Market Wizards interviews last night and seeing that one of the common denominators of trading success is an accurate trend-following programme, I decided to join the MRK party with a small position. This book is like bed-time stories for traders!
If the market turns, I will need to react quickly with aggressive SPY put buying.
Tomorrow will be a crazy day with BOJ, SNB, BOE MPC Meeting Minutes, Bernanke, FOMC Minutes, Existing Home Sales, and HSBC Flash Manufacturing PMI. If data from China surprises to the upside, the party might really be only getting started - until Bernanke says the T word or maybe even the R word somewhere down the line.
And now, even I am one of the market beneficiaries, in a small but meaningful way:
-1.16% Roth IRA
+0.71% FTSE (Hey GOLs!)
-0.54% Hang Seng
-1.07% 10-Year US Treasury Notes
P.S. NBG, one of my winners last week, dropped over 33% yesterday and over 10% today... Thank the Lord I took profits whilst I could!
+$0.2667 per share gain, or +90.90% gross profits...
Wanted to ride it longer, but spreads on this were a little wide - even on the underlying stock.
Rather than risk slippage, I got out with a good enough gain that boosted my repatriation efforts immensely...
Monday, May 20, 2013
Over the weekend, I started reading Market Wizards: Interviews With Top Traders, which has been on my bookshelves for ages. I finally dusted it off and not many pages into the book, the importance of positioning dawned on me as I read Michael Marcus' words: "However, the thing that saved me was that when a trade met all my criteria, I would enter five to six times the position size I was doing on the other trades."
I've had my fair share of winners lately, but my losers still weigh down my account too much, causing me to spend time on repatriation rather than pure profit-taking.
There's an inkling that my trading is finally turning the page for the better as even after withdrawing some cash on Friday, my equity increased today, surpassing what I had on Friday.
It's a good start, but I need to make improvements everyday...
In focus this week:
BOJ Policy Statement on Tuesday or Wednesday
Bernanke + Existing Home Sales + Fed Minutes on Wednesday
Unemployment Claims + New Home Sales on Thursday
US Core Durable Goods on Friday
+0.09% Roth IRA
+1.78% Hang Seng
+0.82% 10-Year US Treasury Notes
Gross gain of something like $0.04, but probably a loss after commissions...
Already have AA calls, so CENX calls are expensive compared to the AA calls I'm holding. If the sector declines again, some of my moola will be out of harm's way...
Shore up my finances, Market Makers!
Saturday, May 18, 2013
+2.87% Roth IRA
+4.50% 10-Year US Treasury Notes
Friday, May 17, 2013
Some time ago, I noticed that whenever consumer sentiment forms a top, a market top also occurs.
But in this all news = good news market, I might be the only one still willing to buy SPY puts...
Thursday, May 16, 2013
... to a market sell-off that has apparently been cancelled until further notice.
Once again, a string of negative data, including an increase in US Unemployment Claims, decreased housing starts, and even a negative Philly Fed failed to create any meaningful pullback. But for a second (?) day in a row, 10-Year US Treasury Notes continued to head lower, signaling traders may be heading into hibernation mode.
I don't know just how early I was to the semi-bear camp, but in hindsight, I could have done better by buying VIX ETF calls rather than selling VIX ETF puts and then stocking up on SPY puts. Thankfully, I recovered quickly this time around and have also hopefully positioned myself correctly for some more upside.
In addition to PER and SDR calls, I'm really into the Nikkei right now and have quite a bit of calls in European equities too.
Apparently, the BOJ's 2% inflation target will result in the BOJ more or less doubling its monetary base by the end of 2014. BOJ Policy dictates that about 4 trillion yen - or $40.8 billion USD - per month will be dedicated to purchasing JGBs, leading to expansive growth in the monetary base at the pace of 6 trillion yen - or $58.8 billion USD - per month.
It sounds like it's much less than what The Chairman is doing, but as a percentage of GDP, BOJ Policy is much more aggressive.
Still, why not up it, Abe + Karoda?
Next week's BOJ Monetary Policy Statement will hopefully launch my Japanese bank calls into the stratosphere!
-2.76% Roth IRA
+0.17% Hang Seng
-4.01% 10-Year US Treasury Notes
10-Year US Treasury Notes seem to be in free-fall...
Not betting the farm as I still have some May 24 '13 SPY puts...
Will aggressively front-run the bulls with SPY put buying if we get definitive downwards momentum, but these additional puts will offset some of the losses if I doubled up too much on my calls...
$0.25 per share gross gain, or +83.33% gross profit...
Got into higher strike earlier expiry issue at around original entry price...
$0.08 gross gain per share, or +28.57% gross profit...
Got into an earlier expiry issue of DRYS calls at a slightly higher strike...
If this thing's got momentum, the risk:reward is pretty good here.
Unfortunately, pressed the wrong button somewhere in between and lost $0.03. Yes, I still do it - pressing the wrong button - but less now and hopefully the final time I press the wrong button...
Wednesday, May 15, 2013
10-Year Notes declined today amidst equity markets that are more bullish than ever before and closing volume on the SPY surpassed its 10-day average for the second day in a row. I've been waiting for the bulls to double up on their bets for some time now. With 10-Year Notes out of sync with the underlying bullish tone of the market and the VIX holding on for dear life, I now wonder if I blinked and missed my opportunity to get into more SPY puts?
Two other 'risk on' markets - the Nikkei and the SENSEX - both logged gains of over 2% overnight, but none of my calls popped enough for me to get out with any bit of financial dignity, though things are slightly better after I joined the semi-bull party.
Even with weaker than expected economic data today, any news is still good news for the Market Makers.
Can Unemployment Claims spike tomorrow and cause a sell-off or will I continue my reign as The Economiss?
+0.82% Roth IRA
+2.49% SENSEX (Well done!)
+0.50% Hang Seng
-0.46% 10-Year US Treasury Notes
P.S. Fortress Investment Group sees gold at $500... I'll be the first to buy if it does go that low...
Tuesday, May 14, 2013
One of the guys on CNBC (Bill??) said: 'Whatever! It's still going higher...' to one of the semi-bears live on national television. This can only happen in the US!
I want to yell 'Whatever!' to the bulls too! During the final few minutes of trading, my Roth IRA knifed down by about -1% very suddenly. And this is where I parked my calls.
The bulk of the knifing came from my SDR and PER calls.
Not being able to take profit is killing me, so I've got to find a way to capitalise on market action tomorrow...
SPY calls are already getting expensive and volume is spiking up, closing above its 10-day average. Last week, SPY calls two handles up and one week out were going for pennies. Today, they're worth a good half dollar. Too bad I let go of my SPY $165 and $166 calls, but you have to take profits...
Bulls, you may be getting a little too complacent and I'll be there to front-run you when the market starts knifing down!
-2.47% Roth IRA
-0.26% Hang Seng
+1.51% 10-Year US Treasury Notes
Monday, May 13, 2013
Spying on how people run other people's stops? Having access to The Chairman's financial moves? Depending on your vantage point, it could be quite a financial turn-on - kind of like corn, which jumped +4.80% today...
I've been pumping more money into calls the past two weeks as I wasn't getting my profit-taking fix with my SPY puts or the VIX, so I resorted to legalised front-running in the form of call-buying en masse. I've been able to close out some positions at good gains, but this just takes me almost back to breakeven with the realised and unrealised losses on my SPY puts. Yes, I went from tiny hedge to full-fledged with these SPY puts.
Thankfully, a lightbulb went on and I started buying calls. But did I buy at a market top? That's what I fear... going overboard with call-buying and inadvertently digging another hole that I have to get out of.
Even with Bernanke's remarks about keeping an eye out for excessive risk-taking, the market continues to hold its highs. So at this point, even I am starting to doubt that there will be any sort of pullback. Maybe the other market spies know better about when exactly a market top will form, but not this SPY. Not this SPY!
A sudden, unexpected shift in sentiment could just as well put my SPY puts back in the green. Unlikely - but anything's possible... even paying $20,000 a year to get spied on!
-2.72% Roth IRA
00.00% S&P (added 0.07 point)
-2.14% SENSEX (Some Akshaya Tritiya profit-taking, Maharajas?)
-1.42% Hang Seng
+1.21% US Treasury 10-Year Notes
Haircut of around 35%...
Small position on FOLD calls...
+$0.15 per share gain, or +42.85% gross profits...
Same sort of situation as NMR calls... got out of same strike calls with later expiry date at a profit and got into earlier expiry date same strike calls at slightly higher entry price, locking in a large part of the gains whilst keeping some calls to ride in case of further momentum...
+$0.33 per share gain, or +100% gross profits!
Got into equal number of shares at same strike with slightly higher pricing with earlier expiry date...
Let's go, Japanese Housewives!!
Friday, May 10, 2013
-1.43% Roth IRA
+0.87 10-Year Treasury Notes
Thursday, May 9, 2013
Whatever it was, it appears the bulls finally doubled up enough to bring about a bout of last-minute 'scramble for the profits and rush for the exits' profit-taking, leading to a SPY close below its daily 50% Fib level! DJT echoed the sudden move downwards, closing with a thud to the downside. Overseas, even the Nikkei failed to hold onto gains, closing in the red today.
Could the Japanese Housewives know something we're not yet cognizant of? Did I overpay for my recent call-buying spree?
My VIX ETFs are in play at the moment and if I see any continuation patterns on the UVXY or the VXX, I'm going to get into some calls. I'm also going to research some foreign ETFs and potentially buy puts on those markets. Maybe...
Let's see if The Chairman can lift the markets up tomorrow with his strong, Atlas-like financial shoulders...
-1.32% Roth IRA
Wednesday, May 8, 2013
DJT looked like it was knifing down and the VIX suddenly popped. Then, the bulls punched back even at these lofty levels and I decided to let go of some SPY puts during the final few minutes of trading at a loss in the name of capital preservation.
Closing volume on the SPY reached 87% of its 10-day average volume. Is this the Double Up Moment I've been waiting for? Are the bulls getting so greedy that we can finally start knifing back with success?
The May 18 '13 SPY Food Chain must look very tasty to the Market Makers, so I've given up hope on repatriating any of the losses on my SPY puts with the May 18 expiry date. By buying out of the money calls, I've learned a few tricks on front running too and I've decided I can just as easily use this strategy when the market turns south - if it ever does.
If we get a bad Unemployment Claims number tomorrow, will the beautiful sell-off I've been waiting for finally occur?
The ultimate would be if we get a bad number and the market still moves higher! I wouldn't misunderestimate the bulls...
+0.41% Roth IRA