Nov 5th – Unsettled market

Volatility is the word of the day. Financials are crushed but much of the market looks good.


Three big down days in a row shook my portfolio a bit. As I don’t have any Microcalendars on, my calendar portfolio does get affected by multiple down days. On the whole, the accts were down 1/2% at the end of the day. I attempted some bullish direction plays, I was early (wrong) on them. I decided to sit on hands once I unwound a few of my positions.
Stir it Up by Bob Marley

My trades:
ADM – with earnings in the morning I added more to my position. I now have 6 units of Dec/Jan 35p calendar for .20 and .19. The Dec has 5% higher volatility and I believe should offer a nice edge when earnings are announce. I like the risk:reward (4:1) on this, with breakevens of 32.5 and 38.5 and post stress test of about 33.25 and 37.25. The Plan: get out of half the trade tomorrow, and trade around the other half to Dec expiration.
CROX – bought @ 42.25 at a 61.8%fib retracement. The plan was to turn in into a collar if the stock rose enough. It made it up to 42.90 before it turned around and stopped me @ 42. There was finally support @ 40.
IWM – 79-75p credit spread for 1.21 @ 78.75. The market tanked and I was stopped out @ 1.44. I played this trade very small and was ok with the small loss.
EK- Exited my entire position. This didn’t do anything good. I sold two units of the Dec/Jan 30p calendar for .12. and the Dec/Jan 27.5p for .26. Basically I lost .08 on two units of the 30’s. I can deal with it, although I should have escaped the day of earnings when the stock did not crank upward.
UNG – I am hedge with a 43 put, but the Nat Gas market was off by more than 3% after last week’s upward surge.
NVLS- remains excellent, it is about time for me to start exiting this trade. I have a 125% gain on 6 units.
USB- I still have 150- 32.5c calendars (6 units) and I am crossing my fingers for another opening of this trade. The best I can do is .20 at this time. I am already in profit mode on this trade as I have sold half of my position @ .20.
LOW – With the underlying down to 25, I am looking to get a 25 calendar hedge. My current 27.5p and 30c calendar is positive but not it very good shape.
I just bought this book

I have always thought that The Market Wizards were 3 of the best trading books ever written. I have read that Hedge Hunters is the “Market Wizards” of the new era of money managers.

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