Market Trading log of Two Fools

NET LIQ VALUE: $23,721.76

2008-10-05T21:09:00.000-07:00

VIX is high as hell. Time decay is killing my ES calls.

Let's see how this week turns out.

NLV $8300

2008-09-29T16:36:00.000-07:00

Short VIX wiped out my account. Further crashes will be completely devastating. I think this might be it. I caught a black swan.

What can $700 billions get you

2008-09-27T11:55:00.001-07:00

Instead of propping up banks for $700 billions, we can maybe, buyout a country.

We can use $700 billions to buy out a country. Randomly assigning 10x GDP for political stable countries and 3-5x GDP for political unstable countries. $700 billions can be use to buy out countries with $70 billion GDP or less:

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html

A lot of African countries and Caribbean Islands can be bought with $700 billions.

What else can we do with $700 billions:

We can establish 10-20 "Ivy League/Well-Established" universities each with endowment fund of $10-30 billions.

Give back taxpayers their money - each of us will get ~$2000 back.

Buy 5,000 F-22s Fighter Jets at $138 millions a piece.

Buy ~200 billions $3 Big Macs from Mickey Ds.

Buy 3.5 millions Ferrari F430s at $200k a piece. Or buy 3.5 millions houses at $200k a piece (avg house price).

Buy 2.8 billions Nintendo Wii - the world would be a happier place.

Pay back 8% of national debt.

Buy 7 billions barrel of oil at $100 a piece. At current consumption rate of ~9 million barrels a day, we can last two years.

Buy up JP Morgan, Citigroup and Bank of America and still have money left.

"Damn, I can't think of ways to spend $700 billions"

NLV $17600 Wachovia on the chopping block

2008-09-27T06:17:00.001-07:00

Shorting VIX has its consequences. It soaked up all my buying power.

By trading in a deadbeat summer, I would like to remind myself the following:

1. Reduce position/stop trading during summer months- dog days of summer is for beaches, nothing good ever came out of trading in summertime.

2. Apple stock moves when there's a product announcement- earning announcement is a non-factor- unless they missed like RIMM did. RIMM on the other hand, is an earning play.

3. Trading the S&P500 is dangerous, I'll stick with the cubes (QQQQ).

4. Oil is still sh**, there is definitely more room to go- pure technical.

5. Market doesn't always trade on fundamental- this week we are trading on bailout plan- ignoring all the crappy econ numbers.

A word on Wachovia:

1. If the bailout plan come through, WB can jump a good 30-40% as they need to get rid of their mortgages ASAP.

2. If the bailout plan failed, don't look for any potential bidder, there won't be any. WB will likely get the shaft up their butt like WaMu did.

JPM paid $1.9 bil for WaMu, what exactly did he buy? Whatever it is, it was much cheaper than $7 bil he offered them couple months back. Only JPM buys bottoms, no one else can. Ask Ken Lewis at BoFA.

Jamie Dimon is definitely feeling "the Woo Hoo!" (www.wamu.com)

Analyst's trade of the day :

Short BAC, Long JPM

NET LIQ VALUE: $31,727.15

2008-09-26T20:22:00.000-07:00

Just a quick update.

Got back from Vegas (and L.A.) and AC a few days ago. Started playing craps and it is SOOO fun!

anyways, most of my SHLD short vertical calls expired worthless ($$$), except the naked call for $100. That got assigned when it closed at about $103. When I woke up in L.A. at around 10am or 12pm EST and found out it was trading at around $96.99 and I quickly covered for a tidy profit. This was 5 contracts, so short 500 shares of vanilla equity.

Started trading the VIX, currently have some naked calls expiring in October; several options, strike ranging from $37.75 - $42.75. I believe it is cash settled because I can't trade the VIX itself.

My ES day trading is doing pretty swell as well. :)

That's all folks!

NLV $22400

2008-09-16T16:17:00.000-07:00

Cover the short on those VIX calls.

Shorted 10 Oct 27.5 calls and 25 Oct 30 calls instead.

NLV $22300

2008-09-15T16:24:00.000-07:00

Lehman trade is busted. No deal.

Shorted 50 VIX Oct 35 calls.

Lehman Part II

2008-09-13T22:20:00.000-07:00

Lehman saga continues with the crooks from government trying to take down another investment bank by having an emergency meeting.

The solution is simple- Lehman should buy itself out. With market values of $3 bil, they can take themselves private for $5 bil.

Lehman can then do away with the short sellers and media - which is trying to profit by destroying the firm. The book value of the firm is $26 bil, even writing down its $30 bil real estate assets by another half - Lehman still worth $13 bil. By taking itself private, Lehman can survive - with bunch of pissed-off ex-shareholders.

+800 sh LEH.

NLV $24900 Where will Lehman be?

2008-09-11T16:31:00.001-07:00

5 MER puts came back for me. Very nice. The Sept. USO calls look like they are done for.

Lehman is hitting the rock hard, quote my friends :

An ex-Lehman employee: Lehman is done

A current Citi employee: i'm actually glad i work for Citigroup today

A current Lehman employee (after I asked her for Lehman shirt and sweater) : idiot! shit aint a joke!

The tension is definitely high.

Note: My PnL is on par with Thomas' now. But I shall destroy him like a Cat 5 hurricane by the end of the year.

$24000 NLV

2008-09-10T17:20:00.000-07:00

Shorted some cubes (QQQQ) at the $46s and 47s. Crashed hard for couple of days. +8.5k

Long USO in front of Gustav - ripped up on this one. -5k

Apple short expired worthless. -3k

As Apple hosted its "Let's Rock" event, the stock tanked back where I started shorting. Lesson learned- Apple only moves on these products announcement date. And look at Steve Jobs, his skinniest is directly correlated with the thinness of his product. As the iPod touch get thinner, so does Steve.

I still question Steve Job's health here. Apple is a $120 stock in disguise.

On the other front, Goldman's earnings will be out next week - have a little bullish feeling on this one as GS is getting sold with this Lehman news. Not sticking my head out for them as there might be couple billions of write down coming. I would short Morgan Stanley instead.

I'm just glad the summer dullness and light volumes days are over. I should not trade during summer time- never had good trades or good reasons to trade. Next year I'm taking a 2 months vacation.

R.I.P. Fannie and Freddie, you guys were such a great couple. Sad to see you go.

NET LIQ VALUE: $29,911.19

2008-09-08T02:53:00.000-07:00

Jeez! it's been a while since i've posted. my fx account pretty much blew up. it was a good lesson learned. way over leveraged and fx is too slow for me (although i have touched the futures and they move f'n fast).

i spoke with a trader last weekend and he taught me some neat stuff, mostly psychological. i think i'm starting to get the hang of futures trading--making sure i have hard stops in place. lesson learned though, i lost more than $3,000 last thursday trying to swing trade the ES, but that thing tanked HARD. picked up a couple of ES options and then we find out that the US gov't is bailing out Fannie Mae and Freddie Mac. That put me in the money of around $1,500, although I covered quite quickly. While picking up the call options, I quickly learned that I'm an idiot. It seems that these future options trade around the clock (stock options trade only during trading hours), so the spread was huge and my bid for the options was only a couple of dimes under the highest bid--so that set me back a good amount before the day even opened.

I'm heading over to the west coas for a trip this Wednesday, so I'm not sure if i will be trading much. I don't want any positions open while i'm gone but I am still short those SHLD vertical calls. Let's hope SHLD closes under $100 next week (even though it has touched $95 and that's getting me a bit nervous).

Good trading all!

$35,701.81

2008-08-04T16:53:00.000-07:00

Just wanted throw a quick update out there. Been trading more actively with the ES. Dollar is just killing me.

$35,340.18

2008-07-29T20:36:00.000-07:00

Dollar rallied. Killing some of my earnings in FX. =(

On a happier note, I just found out I passed level 1 of the CFA curriculum. Woot!

NLV $21----

2008-07-29T16:43:00.001-07:00

I dont know I dont care whats the exact numbers, I'm losing money temporarily.

I took today's rebound to get out of my long SSO. I believe I can get it at a lower price.

I also took today's opportunity to get short Merrill Lynch. + 5 put strike 22.5 September 08

The reason to short Merrill and their b/s CEO is because:

1. They are still patching their balance sheet. Sure most of the CDOs junks are off, but they are still facing tough economics environment. Not to mention they finance 75% of the purchase- so they are only getting ~$2 billions for something that used to be worth $30 billions. NICE TRY.

2. $8.55 billions issued at $22.5 a share- that's below market price. And you paid $2.5 billions to the Singapore to cover their losses. Merrill, who you tryna fool? FOOL!

3. To sneak into the news, a $5.7 billions write off. Net-Net Merrill, you just patched up your balance sheet.

4. That left your core business, which is to sell fancy investment vehicles and schemes to wealthy investors and charge them a nice fees. No other core businesses, just bunch of brokers and FAs. These guys better find more (stupid) wealthy people to pitch their b/s to, because you don't have an i-bank division like GS and MS. In another word, your core business is WEAK. And you sold the only business you have that's actually increasing in value - Bloomberg LP.

Price Target: $15

At $26 bucks and putting a historical P/E of 13 on your core business, you have to earn $2/sh to worth your today's price. With all the dilutions, DREAM ON FOOL!

HEY, WHO SOLD BUNCH OF SHARES BEFORE THE CAPITAL RAISING ANNOUNCEMENT?!!? (DOWN 9% THE DAY BEFORE THE ANNOUNCEMENT). NO INSIDER TRADING HUH??! SEC can BLOW ME.

NLV $22000?

2008-07-26T08:11:00.000-07:00

Another $5k should hit. Didn't bother checking the account.

Same position 400 SSO and 5 puts on AAPL.

Why short AAPL?

1. Steve Jobs health- sure his cancer is not acting up again, but he just had a surgery to fix a "bug".

2. Low guidance- we know AAPL likes to give b/s guidance. But tight margin and lower growth rate...the street has an estimate 24% over what AAPL is giving. So Apple must beat guidance by 24%+...not an easy feat at this time of the year.

3. Technical- lower highs, it looks like the stock is rolling over.

Note: I have 4 more weeks to prove AAPL is not worth at $160.

$35,593.34

2008-07-23T21:43:00.000-07:00

What a bad day. My sleeping schedule is so off and I woke up late. Then VMW recovered along with the market and I'm down 60 cents on the options. Dollar is rallying as well due to oil prices going down, interest rates may be increased and recent market rally!

I still think there's a lot of room for VMW to sink. So I will be holding this position and may add on later.

$17079

2008-07-22T18:48:00.000-07:00

$5k got in. Have a net loss of $1k today. Down $2k on AAPL 150 Aug put. Up $1k on 400 sh of SSO. Real dumb trades. Should pare down some sizes.

$36,516.19

2008-07-22T18:25:00.000-07:00

What a rally today!

Well, I bought 5 puts on VMW. I don't think they will meet estimates and now they are down about 14% after hours. I hope I can profit $1,000 from the options.

EXEC TIME	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	NET PRICE
7/22/2008 2:18:11 PM	SINGLE	BUY	+5	VMW	100	Sep 08	30	PUT	$2.00	$2.00

$36,589.38

2008-07-21T16:14:00.000-07:00

MMM...shorted the ES last Friday at 57.50. went up against me pretty badly, maybe half a grand (10 points). AXP (American Express) got dumped after reporting earnings. Customers are defaulting on their CC loans... which is pretty fucking bad. That and AAPL lower forecasts dropped the ES and I covered at 50.

SWEET.

I was thinking of buying puts on AXP, but never got around to that trade. so that kind of stings a bit. I'm also thinking of doing a little risk-arb with DNA (Genentech) and Roche. But I still have to look into the details of it. I also want to short airlines.

$13307

2008-07-19T10:21:00.000-07:00

Long road to recovery. Adding $10k gun powder. Should show up next week.

$12990

2008-07-16T17:07:00.000-07:00

Caught a falling knife. Wiped out most of the year profit. Never again.

Back to trading regular size.

Long 400 SSO at 58.40

Adding $5000 to pile on to that position.

$36,116.93

2008-07-14T17:10:00.000-07:00

Wow it's been a while since I posted. I got quite lazy over the summer break. But I recently started reading the WSJ again, so hopefully I'll get some ideas soon. Right now, I'm thinking of a paired trade: shorting NYSE and longing NASDAQ. Reason is simply because Nasdaq is gaining more market share than NYSE; there was an article in the Journal today saying that NASDAQ are executing more Big Board trades than NYSE itself!

Also, you can note a jump in my NLV, but that's because I injected $5,000 on June 27th, 2008 into anothr broker, Interactive Brokers, to begin trading forex. Their fx platform is a little bit more developed than ToS. I was long AUD/USD and short USD/CAD. Basically, very bearish on the USD. Reasons include inflation troubles (oil, agricultural and metals) coupled with the Fed's reluctancy to raise rates, Fed's strong support for banks and unwillingness to let them fail ala free markets, real estate troubles, and now extending the credit card debt defaults as well.

I was debating with myself whether I want to include my FX portfolio into the blog, but I guess it's part of my learning experience. It's a major pain in the ass to add the two NLVs together.

Well anyway, like I said I had two positions: 1) long AUD/USD and 2) short USD/CAD. I expected to recieve net interest, kind of like a USD carry trade, but I was disappointed/pissed when I found IB charging my account for interest. Apparently the way they calculate the interest is a net debit interest.

So today, I covered my USD/CAD short because I saw a double bottom forming and my conviction for this trade was wavering. So I covered the trade for a nice $252.50 profit. I kind of regretted the trade later; what I should have done was placed a stop loss order and let the trade run itself. But I tried doing that with the AUD/USD and I had no idea how to do it with IB.

Unable to post chart right now, I'll try to get it up later.

YC: $19136

2008-06-30T17:33:00.000-07:00

The SPY calls are killing me. It is the worst trade of the year. Not because of the big drawdown it creates in my account. It is because I average down when all I wanted 10 contracts. I martingaled it.

NET LIQ VALUE: $30,272.94

2008-06-27T17:56:00.000-07:00

big draw downs.

i'm thinking of adding to my losing position. keep in mind, this is a long term trade.

NET LIQ VALUE: $30,660.44

2008-06-26T23:28:00.000-07:00

TIME PLACED	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	RULES	STATUS
6/26/2008 8:32:22 AM	FUTURE	SELL	-1	/GEU8	1			FUTURE	$97.02 LIMIT	DAY	FILLED

YC: +40 SPY 129 Calls

2008-06-26T16:30:00.000-07:00

I started with 10 calls, then I just kept adding....crap. Didn't know the position is getting that big.

NLV $20893

NET LIQ VALUE: $30,725.94

2008-06-26T05:31:00.000-07:00

YC : -20 USO put

2008-06-25T17:14:00.001-07:00

Sold my put for good profit. Lucky the oil inventory come in above expectation.

NLV $21565

YC: +15 USO Puts

2008-06-24T21:09:00.001-07:00

+15 more contracts.

Total +20 USO 110 Strike July 08 Put.

NET LIQ VALUE: $30,994.69

2008-06-23T22:28:00.000-07:00

IME PLACED	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	RULES	STATUS
6/23/2008 12:40:54 PM	FUTURE	SELL	-1	/GEN8	1			FUTURE	$97.08 LIMIT	DAY	FILLED

shorted 1 eurodollar. US must raise interest rates to fight inflation. want to short dollar against the JPY and AUD too.

Oil again

2008-06-23T16:45:00.001-07:00

+ 5 USO Put 110 strike July

NLV $19130

2008-06-20T16:37:00.000-07:00

Bought 20 July Puts 50 Strike QQQQ yesterday at the close and quickly sold them today. Not bad not bad...

NET LIQ VALUE: $30,916.45

2008-06-20T13:48:00.000-07:00

EXEC TIME	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	NET PRICE
6/20/2008 9:47:47 AM	VERTICAL	SELL	-5	SHLD	100	Sep 08	100	CALL	$0.88	$0.50
6/20/2008 9:47:47 AM	VERTICAL	BUY	+5	SHLD	100	Sep 08	110	CALL	$0.38	$0.50

sold a vertical call spread on SHLD.

summer is getting to me. so lazy and i can't generate any trade ideas!!!

NLV $17989

2008-06-17T17:56:00.000-07:00

- 5 puts USO 112 Strike July 08

was looking for more downside, didn't get them today. Sold out for a profit.

2/1/2007	($5,000.00)
11/1/2007	($5,000.00)

6/17/2008	$17,989.00

annualized irr	75.82%
return	79.89%
net	$7,989.00

Celtics in 6. I don't lie.

http://tradingtyyc.blogspot.com/2008/06/y-index-16400.html

NLV $17860

2008-06-16T16:59:00.000-07:00

Here I go again:

+5 puts USO 112 strike July 08

NET LIQ VALUE: $30,906.46

2008-06-12T22:10:00.000-07:00

EXEC TIME	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	NET PRICE
6/12/2008 10:20:12 AM	VERTICAL	BUY	+2	LEH	100	Jun 08	38	CALL	$0.03	$0.01
6/12/2008 10:20:12 AM	VERTICAL	SELL	-2	LEH	100	Jun 08	40	CALL	$0.02	$0.01
6/12/2008 10:20:10 AM	VERTICAL	BUY	+4	LEH	100	Jun 08	38	CALL	$0.03	$0.01
6/12/2008 10:20:10 AM	VERTICAL	SELL	-4	LEH	100	Jun 08	40	CALL	$0.02	$0.01
6/12/2008 9:14:35 AM	VERTICAL	BUY	+1	LEH	100	Jun 08	38	CALL	$0.03	$0.01
6/12/2008 9:14:35 AM	VERTICAL	SELL	-1	LEH	100	Jun 08	40	CALL	$0.02	$0.01

covered my LEH spread.

NET LIQ VALUE: $30,909.46

2008-06-11T22:38:00.000-07:00

no trades.

NET LIQ VALUE: $30,897.46

2008-06-10T23:46:00.000-07:00

no trades.

NET LIQ VALUE: $30,877.97

2008-06-09T23:09:00.000-07:00

TIME PLACED	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	RULES	STATUS
6/9/2008 1:38:37 PM	SINGLE	SELL	-7	GPS	100	Sep 08	15	PUT	$0.60 LIMIT	DAY	FILLED

Covered my Gap (GPS) put.

LEH is in trouble.

Gee....$17440

2008-06-09T11:18:00.001-07:00

Closed out both LEH and AIG. Nothing major left on my book.

I think it's time for me to move my risk level up so I can bank more. This is getting slow.

Strategy run through

2008-06-08T10:14:00.000-07:00

Strategy: Timing the market. Price is everything. Technical and Fundamental. Trade size varies with the level of conviction.

Instrument: Options, ETFs, stocks

Risk tolerance: 20-25% values of portfolio per day.

Average return per trade: 10-20%

Profitable trades:
GS 2000 +
USO 2000+
SPY 800+
VIX 1000+

Losers:
ES mini -1000
VLO -600
AAPL -200
C -150

NLV $16700

2008-06-07T17:57:00.000-07:00

playing catch up?

NET LIQ VALUE: $30,611.97

2008-06-06T18:14:00.000-07:00

NET LIQ VALUE: $30,431.47

2008-06-05T22:58:00.000-07:00

no trades

NET LIQ VALUE: $30,552.47

2008-06-04T17:41:00.000-07:00

no trades

edit: we all know the Lakers are taking it. this shit is rigged!

Y Index 16400

2008-06-03T20:11:00.000-07:00

- 4 AIG July 40 Puts @ 4.80

Don't like the price action on AIG. Got out half of the position.

Lemon Brothers is turning sour. Thinking of covering. Thanks to my company personal trading policy. I did not have the exposure I wanted.

On a side note: Celtics in 6!

NET LIQ VALUE: $30,490.52

2008-06-03T18:29:00.000-07:00

EXEC TIME	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	NET PRICE
6/3/2008 10:54:55 AM	VERTICAL	SELL	-7	LEH	100	Jun 08	38	CALL	$1.04	$0.45
6/3/2008 10:54:55 AM	VERTICAL	BUY	+7	LEH	100	Jun 08	40	CALL	$0.59	$0.45

first spread trade!

this is net bearish on LEH. basically my net break even price will be @ ~$37.20. anything less and I will profit with $315 at expiration.

NET LIQ VALUE: $30,523.52

2008-06-02T19:19:00.000-07:00

EXEC TIME	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	NET PRICE
6/2/2008 11:00:05 AM	SINGLE	SELL	-5	HD	100	Aug 08	40	PUT	$13.20	$13.20
6/2/2008 9:37:29 AM	STOCK	BUY	+100	LEH				STOCK	$35.60	$35.60

New all time high baby!

Short Idea: LULU Morons!

2008-05-31T07:14:00.000-07:00

http://finance.yahoo.com/q/bc?s=LULU&t=1y

These guys sell yoga mats and other type of accessories. The chart is ugly, the business (retail) is ugly. What's not to hate?!

Short LULU!

$15700

2008-05-31T07:05:00.000-07:00

Cover 10 XHB @ 2.55 a piece- net $90 or so... whoop-de-do

AIG is oversold + the upgrade from Morgan's analyst helped boost its stock price. AIG was up over 4% on pre-market. Only to see half of the gains vanished by the close of the day. I'm breakeven on the AIG trade and down a bit on LEH.

Hurricane season starts officially on June 1st. Let see how we holding out this year. Never before do I think the insurers would be in trouble- especially the Big Dog like AIG. But stupid people do stupid things- one of their subsidiary is short massive amount of Credit Default Swaps- which caused losses of $9 billion last quarter. With more loan defaults and downgrade of mortgage back securities products, I think AIG has to take more pain next quarter. They are already tight on capital without any natural disaster. One major hurricane is all it take to tip them over at the brink of disaster. Maybe the Federal Reserve will consider open its discount window to the insurer then?

NET LIQ VALUE: $30,103.07

2008-05-30T13:46:00.001-07:00

SHLD missed earnings yesterday. More gloom and doom in the housing market. All time high.

EXEC TIME	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	NET PRICE
5/30/2008 9:21:01 AM	SINGLE	BUY	+5	SHLD	100	Jun 08	95	CALL	$0.40	$0.40

covered 5 options for SHLD.

short, long, short....I'm all over the place

2008-05-29T17:44:00.000-07:00

New position:

+2 LEH July 40 strike Put @ 6.25

+8 AIG July 40 strike Put @ 5.25

Old:

-10 XHB Dec 19 Put @ 2.65

+100 S @ 6.06

+100 KRY @ 4.23

NLV: $16,100

Sears Posts Unexpected Loss; Costco Profit Exceeds Estimates

2008-05-29T05:24:00.000-07:00

http://www.bloomberg.com/apps/news?pid=20601087&sid=aFvdjFm32P4M&refer=home

"Sears fell $3.51, or 3.9 percent, to $85.85 at 7 a.m. New York time in trading before the Nasdaq Stock Market opened. The shares declined 12 percent this year through yesterday."

Uh...sweet? But as of right now, the bid x ask is at 90.36 x 90.86, so I'm confused...

NET LIQ VALUE: $28,591.09

2008-05-28T19:20:00.000-07:00

EXEC TIME	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	NET PRICE
5/28/2008 2:07:17 PM	SINGLE	SELL	-5	SHLD	100	Jun 08	95	CALL	$2.30	$2.30
5/28/2008 1:34:27 PM	STOCK	BUY	+100	LEH				STOCK	$35.20	$35.20
5/28/2008 10:33:33 AM	SINGLE	SELL	-3	SHLD	100	Jun 08	100	CALL	$1.15	$1.15
5/28/2008 10:33:33 AM	SINGLE	SELL	-2	SHLD	100	Jun 08	100	CALL	$1.15	$1.15

NET LIQ VALUE: $28,550.65

2008-05-27T14:47:00.000-07:00

New home sales data were better than expected: bullish rally. And the market thinks the housing market is picking up (and foreclosure auctions too).

Attempted two trades today:
Shorted 200 shares of LEH with an average price of $36.045.
Tried to buy a few puts for AIG, but didn't execute.

I'll try again tomorrow.

I play analyst

2008-05-26T09:22:00.000-07:00

Sell :

Bonds (inflation is going to eat away real return, non-inflation index bonds are done)

AIG - the sneaky insurance company raise $12 billions dollar. One hurricane and AIG would be in deep doodles

LEH - holding off on those write downs huh?

LUV - fuel hedges are running out. Enjoy the $50 a barrel hedge while you can!

Hold:

FXI/EWT - China/Taiwan for long term.

PBR - The Black Gold mine.

EWZ

Buy:

TIP - iShares Lehman TIPS Bond (TIP)

NET LIQ VALUE: $29,037.16

2008-05-25T10:22:00.000-07:00

Friday's NLV. The ES trades KILLED ME.

Studying for CFA now, so not much time left to trade. (although I'm not too concerned about passing the CFA or not.)

NLV $15700

2008-05-24T11:09:00.000-07:00

The market continued to get pressure on downward movement. Sell in May and Go away is in effect.

New Trade:

- 5 XHB Dec 08 19 Puts.

Open Position:

-10 XHB Dec 08 19 Put
+ 5 VLO Jun 08 60 Call
+5 C June 08 12.5 Put

I'm doubling down as usual.

NET LIQ VALUE: $29,741.17

2008-05-22T19:34:00.000-07:00

NLV $16000 + change

2008-05-22T19:06:00.000-07:00

Sold those SPY puts for $800. Gains were offset by some bullish play on XHB. Plan to get rid of these XHB puts (sold short).

Also have some VLO June 60 calls - it has been a small losing trade...but looks like it might be turning corner. Loving the OIL bubble.

Watch List: STLD. NUE has been going around to raise money. STLD becomes such an attractive target for NUE. CRS, CMC also can be a target.

NUE has the balance sheet flexibility. Recently, NUE is looking to raise $3-4 billions in the capital market. NUE also has $700 mil cash on hand and $4.8 bil short term assets. Making a medium size acquisition of companies with market cap under $10 billion is totally feasible for Nucor. Merger for metal companies give them more bargaining power with the suppliers, cost cut on excess labor and technology that can help further increase production efficiency.

NET LIQ VALUE: $29,689.17

2008-05-21T18:55:00.000-07:00

HD continues to drop.

All time high of $30,000+ intraday, until...

I bought 1 ES car at 1401. I'm an idiot, always getting on the wrong side of the trade.
=(

NET LIQ VALUE: $29,845.17

2008-05-21T06:38:00.000-07:00

Missed a post last night.

HD dropped like it is hot.

+ 5 June SPY 144 Puts

2008-05-19T21:00:00.000-07:00

Liking the afternoon price action, I bought some puts on SPY. There is actually a put expire on 4th week of the month... interesting.

NET LIQ VALUE: $28,406.18

2008-05-19T13:39:00.000-07:00

Bought +5 HD puts August expiration $25 strike for $0.40.
HD earnings out tomorrow.

ES is killing me. I want to cover my short but... I can't psychologically do it! damn me.

NET LIQ VALUE: $28,418.68

2008-05-16T20:16:00.001-07:00

consumer confidence hits 28 yr low.

NET LIQ VALUE: $28,468.68

2008-05-15T16:51:00.000-07:00

HD rises, down $150 more/total open PNL ($612.50)

SOLD -1 /ESM8 @1413.75 CME
holding overnight. ($412.50) at the moment

NET LIQ VALUE: $29,165.18

2008-05-13T22:46:00.000-07:00

traded ES for +$50. HD went up again.

NET LIQ VALUE: $29,221.18

2008-05-12T14:18:00.000-07:00

Wal-mart is rumored to come out with good earnings tomorrow. Retailers rise. One headline from Bloomberg says WMT may have taken market share from Sears and Macy's. SHLD rose today... makes no sense.

NET LIQ VALUE: $29,496.18

2008-05-09T14:10:00.000-07:00

SHLD options continue to fall in value. nice.

EXEC TIME	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	NET PRICE
5/9/2008 9:24:54 AM	SINGLE	BUY	+5	HD	100	Aug 08	40	PUT	$12.00	$12.00

Bought +5 Home Depot puts for $12. Risking up to $6,000 to bet that Home Depot will fall in value. I bought (in paper account) +5 Lowe's puts on 5/1 and it is currently up $1,000+. So let's see how this HD trade will work out.

NET LIQ VALUE: $29,391.18

2008-05-08T22:14:00.000-07:00

No trades. Tried to short McDonald puts but didn't execute.

NET LIQ VALUE: $29,356.18

2008-05-07T20:23:00.000-07:00

All time high. SHLD drops some more and I traded the ES for +$50. Sold BBY naked calls for $125.

NET LIQ VALUE: $29,134.68

2008-05-06T17:22:00.000-07:00

Sears Holdings price target cut by Deutsche Bank, drops to $95. woot!

NET LIQ VALUE: $28,672.18

2008-05-05T19:53:00.000-07:00

Mostly paper gains, SHLD coming back down. If it comes back up to $103 range I will buy puts on it.

Traded ES and lost $75 realized for it.

New High. Where to now?

2008-05-03T14:40:00.000-07:00

The Bulls have won the battle. Look for a temporary sell off.

NET LIQ VALUE: $27,939.18

2008-05-02T13:32:00.000-07:00

paper losses.

SHLD shot up to $103.22, let's see how it will open on Monday

NLV $15560

2008-05-01T20:22:00.001-07:00

Back in the game! Sold out my USO puts for a nice profit. Account hits new high.

NET LIQ VALUE: $28,682.21

2008-04-30T19:41:00.000-07:00

what a sweet day.

shorted 1 ES at $1405.25 right after the fed cut announcement and placed a cover call at $1399.00. It hit and grossed me $312.50 in less than two minutes. SWEET.

and my options are coming back. SHLD's day pnl: $625.00

Happy day.

NET LIQ VALUE: $27,553.21

2008-04-29T13:34:00.000-07:00

No trades today. SHLD traded up to $103 though. That got me a little nervous. I noticed that the mark of the options didn't move in sync with the underlying. That was very interesting. Maybe some insider trading or it's not liquid enough. I should really learn how to price options.

NET LIQ VALUE: $27,643.21

2008-04-28T22:49:00.000-07:00

Not much went on today. I thought of shorting some more SHLD but decided against it; I will after the Fed announcement this coming Wednesday. SBUX report earnings on Wed too.

NLV $12900

2008-04-26T15:26:00.001-07:00

Took a massive beating this week.

Long 20 contracts put May 89 USO

All eggs in one basket...

NET LIQ VALUE: $27,985.72

2008-04-25T17:49:00.000-07:00

As expected, MSFT tanked and my call option is pretty much worthless. I sold a 5 calls for SHLD @ $1.20 May $105.

4/25/2008 8:37:59 AM

SINGLE

SELL

-5

SHLD

100

May 08

105

CALL

$1.20

BBY is $45, creeping up to my $47.50 strike naked calls.

NET LIQ VALUE: $28,455.72

2008-04-24T18:57:00.000-07:00

Trades (excluding futures):

4/24/2008 10:56:31 AM

SINGLE

BUY

MSFT

100

May 08

CALL

$0.40

4/24/2008 8:40:03 AM	SINGLE	BUY	+5	RIMM	100	May 08	140	CALL	$0.90	$0.90
4/24/2008 8:37:48 AM	STOCK	BUY	+100	URBN				STOCK	$32.50	$32.50

Covered my URBN short and realized several hundred in losses.

Covered my RIMM today at $0.90 to realize $75. good thing I did that. RIMM jumped to the $123-125 range in the mid-day.

Bought 5 MSFT calls hoping that they beat earnings tonight (which they did). But it is trading down after markets because they are lowering their forecasts for Q3. It's only $200 exposure, so that's a good cheap lesson learned. Will probably hold it to expiration and see how it goes.

NET LIQ VALUE: $28,502.23

2008-04-23T20:13:00.000-07:00

scene: I'm in Atlanta's airport connecting to a flight for Cancun. I call my broker and SHLD shot up to about $103-104 on goo d earnings from other co's. I'm pussying out and told him to cover my 5 April naked calls at $3.7. I sold them at $2.10. So, 500 x (3.7-2.1) = $800 loss. And I find out later that it opened higher on monday then retreated to below the strike of $100. I'm a fucking idiot. SHLD is trading today afterhours at $95. I could've been up $6,000 on this baby.

Lesson learned. ;(

Sold 5 naked calls of RIMM at $1.05

EXEC TIME	SPREAD	SIDE	QTY	SYMBOL	SPC	EXP	STRIKE	TYPE	PRICE	NET PRICE
4/23/2008 9:08:58 AM	SINGLE	SELL	-5	RIMM	100	May 08	140	CALL	$1.05	$1.05

Option holdings:

BBYFW	BBY 100 JUN 08 47.5 CALL	-5	$0.95	($475.00)
KTQFY	SHLD 100 JUN 08 130 CALL	-5	$0.45	($225.00)
URQRX	URBN 100 JUN 08 22.5 PUT	5	$0.15	$75.00
SQXEV	SBUX 100 MAY 08 21 CALL	-5	$0.04	($20.00)
RULEH	RIMM 100 MAY 08 140 CALL	-5	$0.845	($422.50

I'm looking to sell a few naked calls on Blockbuster.

NLV $14583

2008-04-20T15:45:00.000-07:00

Traded some ES. NLV slowly marched back up. No setup this week. Market is closing in on new highs. Break thru 1400, we are set up for a nice bull run.

NET LIQ VALUE: $28,254.75

2008-04-16T20:39:00.000-07:00

haven't traded much lately. really busy at work.

two new options positions:

4/16/2008 2:36:43 PM

SINGLE

SELL

-4

SHLD

100

Apr 08

105

CALL

$0.40

4/16/2008 12:50:50 PM

SINGLE

SELL

-5

SHLD

100

Apr 08

100

CALL

$2.10

option positions:

OPRA	DESCRIPTION	CONTRACTS	PRICE	MKT VALUE
BBYFW	BBY 100 JUN 08 47.5 CALL	-5	$0.875	($437.50)
KTQDT	SHLD 100 APR 08 100 CALL	-5	$2.95	($1,475.00)
KTQDA	SHLD 100 APR 08 105 CALL	-4	$0.55	($220.00)
KTQFY	SHLD 100 JUN 08 130 CALL	-5	$1.15	($575.00)
URQRX	URBN 100 JUN 08 22.5 PUT	5	$0.25	$125.00
SQXEV	SBUX 100 MAY 08 21 CALL	-5	$0.065	($32.50)

NET LIQ VALUE: $29,045.27

2008-04-14T22:05:00.000-07:00

i had an exam today. didn't really feel the vibe trading. i stopped with a $200 loss on the ES. shorted 100 shares of URBN by MISTAKE!

good thing my naked calls are going black.

WTF spike?

2008-04-14T05:31:00.000-07:00

wth just happened? i was just short this too and good thing i covered.

Okay, so retail sales came out @ 8:30am. beated estimates of 0.0% to 0.2%

it's already trending back down to 1327.

"Dude, where is my return on investment?"

2008-04-12T15:37:00.000-07:00

Let's play this game call "ANALYST"

Buy? Sell? or Hold?

SELL SELL SELL?

NET LIQ VALUE: $29,150.47

2008-04-11T19:33:00.000-07:00

So my short came in today. GE misses its earnings expectations and revenues fall short. Consumer confidence also short of expectations. Earned more than $4,000 today.

Good day all!

NLV $14300

2008-04-11T17:50:00.000-07:00

I'm lagging return big time. It's time for me add more gun powder to my account. I'm going to add $5000 to the account. Next week. I'm gunning for $10k profit by year end.

Perfect SH set up, I let it go and not get back in. How stupid.

S&P futures vs fair value: -14.4

2008-04-11T06:06:00.000-07:00

quick morning update. got to the office and the ES is down 14 points. tanked because of GE earnings.

GE Profit Declines, Misses Estimates, as Credit Freeze Forces Writedowns General Electric Co. reported its first decline in quarterly profit since 2003, missing analyst estimates with a 12 percent drop in earnings as a freeze-up in credit markets blocked asset sales and forced it to write down the value of investments.

covered 2 ES shorts. currently up about $3770 for the day. waiting for consumer sentiment to come out @ 10am. i think it'll drop more from there. 80% of the US economy is driven by consumer spending.

also forgot to note yesterday: i sold -5 naked call options on Sears (SHLD) for $1.80

NET LIQ VALUE: $24,627.48

2008-04-10T22:02:00.000-07:00

market rallied today based on a mixed news. good earnings or upward revision of earnings for companies like GE, Walmart, and tech companies. Goldman Sach's CEO Blankfein also agreed with Morgan Stanley's CEO John Mack that the recession is closer to the end than it is to the beginning. I however feel very different. If they really knew what was going on, would they be in this credit meltdown? Consumer sentiment comes out tomorrow at 10am. There is already an article on Bloomberg saying it will be pretty bad.

Consumer Sentiment in U.S. Probably Fell to 16-Year Low on Jobs

By Courtney Schlisserman

April 11 (Bloomberg) -- Confidence among U.S. consumers sank to a 16-year low this month as the labor market continued to weaken and gasoline prices rose, economists said ahead of a private report today.

I am short overnight four ES contracts. We'll see how it ends up.

NET LIQ VALUE: $27,461.48

2008-04-09T18:40:00.000-07:00

what a sweet sweet day.

bad news all over.
IMF predicts $945 bn in writedowns. co's are missing earnings. etc etc.

covered all my ES shorts. so now i can sleep a little more sound.

naked calls are growing blacker lol.

here's a quick analysis i did on my returns:

12/20/2007	($10,000.00)
3/20/2008	($10,000.00)
4/2/2008	($5,000.00)

4/9/2008	$27,461.48

annualized irr	85.09%
IRR	4.34%
Net	$2,461.48

NET LIQ VALUE: $26,389.98

2008-04-07T18:39:00.000-07:00

same old. my naked calls are coming back into the black. shorted a ES and it shot up. left a limit order to cover at 1.50 under. that hit later in the noon.

A few news headlines:
Alcoa Profit Drops 54%, Falls Short of Estimates on Rising Commodity Costs
Advanced Micro Misses Its Revenue Forecast, Plans to Eliminate 10% of Jobs
TPG and other PE firms plan to inject $5bn into WaMu

Consumer Credit - M/M change
Consensus	$ 5.3 B
Actual	$ 5.1 B

NLV $25,718.49

2008-04-06T14:46:00.000-07:00

same old.

sold -5 SBUX naked calls for $0.25 each.

Chinese oil

2008-04-06T09:21:00.000-07:00

"We Chinese no pay twice for gas!"

In my other blog, I've mentioned in November that PetroChina is way overpriced. (and some what skeptical of GOOG @ $700). I'm officially patting me-self on the back.

http://credoip.blogspot.com/2007/11/whole-lot-of-irrational-exuberance.html

Time to be bearish?

2008-04-06T08:57:00.000-07:00

A nice buy-the-dip/support level trade here. SH = Inverse S&P 500 return x 2.

@1360-70, the risk/ reward of shorting the S&P become favorable. I'll start to look for levels to short into the ES.

The employment news was just bad. The market doesn't seem to be reacting too much to it. All we need is some bad news to send this market down the spiral.

Apr 07	15:00	Consumer Credit	Feb	$5.0B	$6.0B	$6.9B
Apr 08	10:00	Pending Home Sales	Feb		-0.5%	0.0%
Apr 08	14:00	FOMC Minutes	Mar 18
Apr 09	10:00	Wholesale Inventories	Feb	0.7%	0.5%	1.0%
Apr 09	10:30	Crude Inventories	04/05	NA	NA	7317K
Apr 10	08:30	Initial Claims	04/05	380K	NA	407K
Apr 10	08:30	Trade Balance	Feb	-$57.6B	-$57.4B	-$58.2B
Apr 10	14:00	Treasury Budget	Mar	-$70.0B	-$80.0B	-$96.3B
Apr 11	08:30	Export Prices ex-ag.	Mar	NA	NA	0.5%
Apr 11	08:30	Import Prices ex-oil	Mar	NA	NA	0.6%
Apr 11	10:00	Mich Sentiment-Prel.	Apr	68.0	69.4	69.5

Pending home sales and FOMC will be the market mover of the week. Monday would likely be a slow day. I'm looking for the market to get volatile after Tuesday. Volatility = Opportunity.

What's the rate cut expectation by the way?

NET LIQ VALUE: $25,459.49

2008-04-03T21:04:00.000-07:00

Capital injection came in and reflected in price. Not much trading today, but there were some big news. Jobless claims came out worse than expected. From Bloomberg:

New Claims - Level
Consensus	366 K
Actual	407

Definition
New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smoothes out weekly volatility. Why Do Investors Care?
Jobless claims are an easy way to gauge the strength of the job market. The fewer people filing for unemployment benefits, the more have jobs, and that tells investors a great deal about the economy. Nearly every job comes with an income that gives a household spending power. Spending greases the wheels of the economy and keeps it growing, so a stronger job market generates a healthier economy.
There's a downside to it, though. Unemployment claims, and therefore the number of job seekers, can fall to such a low level that businesses have a tough time finding new workers. They might have to pay overtime wages to current staff, use higher wages to lure people from other jobs, and in general spend more on labor costs because of a shortage of workers. This leads to wage inflation, which is bad news for the stock and bond markets. Federal Reserve officials are always on the look out for inflationary pressures.
By tracking the number of jobless claims, investors can gain a sense of how tight, or how loose, the job market is. If wage inflation threatens, it's a good bet that interest rates will rise, bond and stock prices will fall, and the only investors in a good mood will be the ones who tracked jobless claims and adjusted their portfolios to anticipate these events.
Just remember, the lower the number of unemployment claims, the stronger the job market, and vice versa.

George Soros also spoke out about things haven't been this bad since the Great Depression (late 1920's). Markets tanked pre-market open and at the market open, but rallied at 10am. I believe this is because investors expect the Fed to bail them out. I think commodity prices and companies related (eg. Exxon) also drove the market higher. I was sort of bullish on the dollar, but now I just want to short it.

Made two dumb trades that happened because I had default futures order at 2 cars, when I meant to do one car. Lesson learned.

Employment situation supposed to come out today at 8:30am. We'll see how that goes.

$5,000 capital injection, NET LIQ VALUE: $20,717.99

2008-04-02T18:25:00.000-07:00

Liquidity crisis!

added another $5,000 to the account. another margin call ;(. funds aren't reflected yet. this is a convo between me and yin last night:

yang: im just worried about margin calls tom
yin: damn man
yin: whats ur avg price
yin: u only took 5pt
yang: yea
yang: lol
yin: thats some dangerous shit dude
yin: u not afriad at all?
yang: na
yin: jesus
yin: what if it goes against u
yin: what would u do
yin: WWTD
zyang: liquidity crisis
yang: lol
yang: prob inject 5k?
yang: ask for some foreign investments
yang: sell some convertibles like leh an dhope it oversubscribes?
yang: lol

anyway while i was asleep at 6am, the ES dropped to about 1363, below my avg of 64.5. missed my cover chance! it opened against me this am at work, i was quickly down about 1 grand for the day. i believe i was down almost 2 grand too. then in the late afternoon started dropping. i covered one contract (limit buy) at 63. that was the low for the day so i caught that one nicely. news today: paulson argues that the recession won't be that bad; bernanke warns of a possible recession. nice contradictions.

BBY's earnings were not as bad as expected due to laptop sales. opened up to 45.8, from previous day's 43.47. scared that crap out of me. 1) i have a NAKED call on bby, and 2) shows that the US economy is freaking resilient. good thing that sh*t traded back down to 43.94

anyway im still short 3 ES overnight again. hope it drops a good 10 points so ill earn a few grand.

NET LIQ VALUE: $20,258.49

2008-04-01T19:37:00.000-07:00

back to square one. what a crazy day.

began trading 2 contracts per trade.

i was shorting and covering on a bull day.
early am, i was +$212 but decided to earn up to $500 or so. quickly blew me back down to -80 - +160. then things got really wild and i shorted and i didnt put a stop loss. i felt that the market would slip near the close. didn't go that way and decided to short two more cars. no way the market would rally nearly 4% on no change in fundamentals. as yin said, LEH's issue was oversubscribed and the ISM was better than expected but still. there were PLENTY of bad news, eg. UBS, MER writedowns, more writedowns expected to come, etc. a interesting tidbit is that the SEC has allowed the banks to mark to model aka mark to whatever you want.

so im down a bit over a grand over the 4 es shorts (which i am still holding; hope market drops)
BBY naked call option dropped $238
URBN put option dropped $75

SYMBOL	DESCRIPTION	CONTRACTS	SPC	TRADE PRICE	MARK
/ESM8	E-mini S&P 500 Index Futures,Jun-2008,ETH	-4	50	$1,364.375	$1,369.25

OPRA	DESCRIPTION	CONTRACTS	PRICE	MKT VALUE
BBYFW	BBY 100 JUN 08 47.5 CALL	-5	$1.625	($812.50)
URQRX	URBN 100 JUN 08 22.5 PUT	5	$0.40	$200.00