Sunday, 13 January 2008

Summary of last week

Sold GBP/AUD on Sunday night, and covered it on Wednesday for a 3 point profit, or nearly $3,000. Looks like I was early though, as it moved down a further 3 points. Looks like I may have been right when I said a breakout to the downside was possible.

However, at least I am partly ok with missing the extra part of that move, as on Wednesday I bought some AUD/JPY which I then sold on Friday for a 1 point gain of almost $2,000.

Finally in FX, my EUR/USD options expired for a loss of $680.

In commodities, I tried to increase an oil short that was working for me, but got stopped out for a gain of $1,200.

In indices, I added a short on the DAX (German stock market) through selling a call and buying a more OTM put...I was frustrated as US stocks fell, but I wasn't particularly short, so got involved in the DAX since it seems to be holding up way too well, and I think Europe will eventually start feeling more of the effects of the credit crunch. This trade has marginally moved my way.

Within interest rates, I did a pretty horrible trade, selling some Sep '08 Eurodollar on Thursday, just before Bennie B threatened to slash interest rates. Great...down 24bps, or $2,400.

Individual stocks was where the action really was...some additions to the portfolio were from the UK, where I shorted some Vodafone and bought some Intercontinental Hotels, to compliment my Starwood position. In the US, I sold some United States steel and then covered it just 30 minutes later over 5% lower! An easy $2,000 there. I then re-entered the short on that name on Friday...think this will turn out to be a great trade, steel companies will get hammered in a recession. I also sold some Exxon, which has done nothing yet.

The real action though came with a bunch of trades I put on on Tuesday, while the markets were getting hammered. I bought CFC and MBIA because they were getting smacked down 15% or so, so was playing for a bounce. I also bought some more CFC on Wednesday when it was REALLY cratering. I got my payback when the BoA rumours and then confirmation of the takeover came through. Unfortunately, I wasn't watching the market on Thursday afternoon, so missed the 51% rise and chance to sell that day! CFC fell on Friday, and I still own it, at a profit of about $1,000. Still thinking about this one. MBIA I sold on Friday about a buck higher than I bought it for a profit of just over $1,000...stock had taken off when MBIA cleared a bond deal which gave them enough capital to (probably) keep their AAA rating. RIMM, which I sold on Tuesday, I managed to buy back a crazy 10% lower on Wednesday, which I was obviously delighted with. Finally, Staples and Carmax were both lower, meaning that I'd made money from all 5 of the companies I got involved with on Tuesday. Nice.

Here's hoping this week plays out just as well. I'm hoping my FTSE Put/Call structure really pays off, it's now in-the-money on the 6200 Puts. Expiry is Friday, although if it shows some decent profits and the markets look oversold I may take them off. Also looking at shorting Hungarian currency and the Spanish stock market, and perhaps even Goldman Sachs if it ventures much above $200. The glory days are over for the foreseeable future, but equity investors don't seem to have priced that out of the stock...yet.


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