My post on 7/22/2008, “Be Patient” was meant to serve as a reminder to myself that I have to be patient. 
 

I wrote the post after I realized a quick trade to close 5 PRQTN @ 1.4 and miss the ride to 8.50 the next day!  The trade to close PRQTN was meant to switch my cash to FREJB, a more volatile option with a bigger swing.  The switch was meant for a quick gain and quick gain I got; I closed FREJB two days later and had a realized $400 in two trading days.  However, if I could be patient and wait out for the Costo earning call, I could have a gain of $3,550!  Anyhow, a lesson learnt.

Even after I wrote the post, I made another bad move on FREVB because I wasn’t patient enough and miss the ride on Thursday.  Be Patient!

 

So, by COB 7/25/2008.  I went back to where I started.  I was only $50 away from my goal of $1,000 in gain.  I lost two big rides and back to where I started!

Go into next week, I am short on cash and long 15 NJWIP.  I speculate that after Senate passed the housing bill on 7/26/2008.  I am betting on FNM will gain its ground and move north.  My plan going into next week is simple, just be patient!  I set the exit point for NJWIP @ 4.0 (my cost was 2.5 for all 15 contract) and I believe it’s reachable, maybe not this week but should happen within a month.  Let’s wait and see what next week bring.  

 

 

 

 

financial sector sure was a great ball of fire this past week and no, I didn't get burn.

I had a few thousands swing up and down and I ended up where I started it.  

I will recap my week's trading in my later post and for now, I just want to relax.

TGIF!

 

 

I traded out of my CHLIN & FREJB positions for quick gains as I planned. My total cash value was at $4,186.85, a 29% gain from yesterday and just $55 away from this week's goal: $4241.86. Trying to archive the goal, I went long on FREVB @ 2.9, 10 contracts total. As soon as the order got filled, I put in an order to short all 10 of FREVB @ 3.10 and the order is now pending execution.

If you don't already aware of this, options trading in this volatile market could be very "exciting". I could have 30% gain in one day and get wiped out the next and my strategy for the past few days was to bet on big price swing. Volatile trading days like this provide more opportunities for options to move in and out the money. And now, I am hoping FRE to move below $10 to push my FREVB to $3.10 so I can cash in.

Let's see how it goes.

2 days done, 3 days to go and I am not making much progress.

Yesterday, I closed out on PRQTN @ 1.4 and opened a position with long 5 contracts of FREJB @ 3.

My over all position didn't change much and the goal of $1,000 PnL is still reachable.

Let's see what tomorrow brings.

Last week, it was a pretty good week for Wall Street and an ok week for me.  By EOD 7/19, I had a realized gain of $630.02, unrealized gain of $136.26 and an unrealized lost of $638.74.  I barely made any money.  See my weekly trading recap here:

Below is my portfolio going into next week (7/21 ~ 7/25):

My goal for the next week (7/21 ~ 7/25) is to come out of the week with $1,000 in gain and the game plan is to take quick profits or get out of lose positions more quickly.

I love volatility and my focus next week shall be on the financial sector and my watch list are:   

1. American Express (AXP)
2. Wells Fargo (WFC)
3. US Bancorp (USB)
4. JPMorgan Chase (JPM)
5. Lehman Brother (LEH)
6. Travelers (TRV)
7. Bank of New York Mellon (BK)
8. Fannie Mae (FNM)
9. Freddie Mac (FRE)
10. Washington Mutual (WM)

Let see what next week brings.

Short 5 contracts of WMJA @ $1.65 + Long 5 contracts of CHLIN @ $3.20

Short 5 contracts of WMJA to close out the position and had a realized gain of $160, a 19% gain.

Long 5 contracts of CHLIN (CHL OCT $70 call) @ $3.20. What are the reasons behind this speculation?

Many years back, Asia was so behind in deploying/adapting wireless device, network and technologies and when the Asian country finally got ready to adapt, they had no baggage with legacy systems and was deploying what was the latest and greatest at the time.  So, whenever I visit Taiwan or Japan, I am always amazed by how advanced their wireless technology is, they had 3G phone years before US and most people has more than one cell phones.  I think China will be no different, China is so behind in communication network even today, most places still don’t even have land line phone available.  It only makes sense that with all kind of wireless technologies available today to just skip the land line and go straight to wireless.  And I think China Mobile Limited (CHL) is well positioned for this ride.

I put in an order to long 10 contracts of WMJA this am but only 5 got executed and it was executed @ $1.33. 

I don't have any realized gain/lost today, but I do have an unrealized lost.  See below for detail:

No, I don't think options trading is risky at all but again, I never write naked calls or naked puts.

I like to trade options because I can always know for certain what my worst case (risk) is. And since I only trade with my play money, my leisure money, my disposable cash, so even if worst case happens and I have to lose every dime, no big deal. Now granted that the stock trading is pretty much the same way in this regard, but options trading provides me more leverage with the little amount of play money I have.

So, what do I mean by leverage… let's use the order I put in last night as an example:

I put in an order to long 5 contracts of out-the-money Ciena Oct $20 call (+EUQJD) at @ $2.20, it got executed when market open @ $2.15. The call moved in-the-money during the day, so I trade it off (not exercise it) @ $3.10 and had a hadsome realized gain of $525, a 49% gain! That's what I mean by leverage.

It will take another year or so before I can get FiOS service to my house.  Well, if I can’t get FiOS for another year or so in Columbia Maryland, then to complete the FiOS network build up for entire nation may take a while.

Share price has been dropping for Ciena (Fiber Optic Device maker) for the past few months; I think the company positions itself well in the sector and the current share price is a good buy, so tonight I put in a limit order to purchase 5 contracts of Oct 20 call (+EUQJD) @ $2.20.

So, after have spent 200K on the internet domain name diy.net, my available cash for trading is pretty much limited. And forget about the $2,5000 paper trading game. To make this blog more fun and more active, I am going trade with some real dollars… not much, just whatever I have left in my Ameritrade account, a total of $3,214.30.

With only $3,214.30, I went long on +PRQTN (COST Aug 70 Put) @ $2.65 with total of 5 contract.

To help me visually see how I can gain or lose from this position, I have put together a pike chart below:

 

Why this speculation?

Well, with raising inflation and gasoline price, I had to cut off my spending somewhere hence I have not been to Costo as often as I use to be.

And when I do go, I sure felt price up and goods mix shifted hence I can't find the things I went to buy or at the price I want buy it at.

If you are an average joe then you must feel the same way!

 

Another good reason why you want to keep a trading blog like this is so that you can look back.  So I looked back and found an entry titled "The Commodities Are Hot Hot Hot!!" and I published it on 9/13/2007.  Back then when I wrote the post, the crude was only at 80 dollars per barrel and look what we have today, $142 per barrel!

I have started wondering when would the oil bubble burst ever since it hit $120 per barrel and so far there is no sign of that happening.  I now begin to wonder would the bubble ever burst and what's next?  Is the crude raising because of speculation or it is just fundamental? 

During my month long trip in Taiwan this April, I had great honor of meeting one of a formal chief editor of Barron like publication (http://www.wealth.com.tw/) in Taiwan, Wilbur Du. 

During the dinner meeting with Wilbur, we shared our views on the currently politics situation in Taiwan as the country just had its presidential election, how the election result would impact the relationship between Taiwan and China, and ultimately how would it impact the stock market. 

The dinner was very informative and educational for me and I have learned allot about him and from him.  Wilbur is a seasoned chart reader, a technical trader if you will.  As I focus mostly on fundamental, I have little to no experience with technical analysis.  He got me interested in technical analysis subject and suggested few readings.  He agreed to be my mentor and help me learn as much about technical analysis as I can possibly learn and I am very grateful.

So, to not waste any time, I ordered all the books suggested by him as soon as I returned to the states and the complete list of his suggestion are:

1. Elliott Wave Principle
2. Stan Weinstein’s Secrets for Profiting in Bull and Bear Market
3. Technical Analysis Explained
4. Technical Analysis of the Financial markets
5. Reminiscences of a Stock Operator

Yup, allot of readings, I know!  And I also know not everyone can get a chance to have a mentor like Wilbur.  So I have no intention to waste the opportunity and have already started my reading.  I will share my reviews and thoughts from my reading here in days to come. 

Let’s learn the Technical Analysis together!  

 

The following exchange took place on Craigslist - the investment banker''s response is a classic!

Original Post

''What am I doing wrong?

Okay, I'm tired of beating around the bush. I'm a beautiful (spectacularly beautiful) 25 year old girl. I'm articulate and classy. I'm not from New York. I'm looking to get married to a guy who makes at least half a million a year. I know how that sounds, but keep in mind that a million a year is middle class in New York City, so I don't think I'm overreaching at all.

Are there any guys who make 500K or more on this board ? Any wives ? Could you send me some tips ? I dated a business man who made an average of around 200 - 250K. But that's where I seem to hit a roadblock. $250,000 won't get me to Central Park West. I know a woman in my yoga class who was married to an investment banker, and lives in Tribeca. She's not as pretty as I am, nor is she a great genius. So what is she doing right ? How do I get to her level ?
 (More)

I am still not sure how to read the FOMC 50 basis points federal funds rate cut.  Is our encomy that bad? 

Oh well, let's see how long this rally will continue... I am stay on the sideline for now and getting ready to short the market.

Meantime, let me share this clip with you....  This is where I came from... Taiwan.  enjoy...

NFLD hit my stop-lose @ $2.00 today and so, my trade trigger bought it back @ $2.00.  Now, let’s review the trade.

I shorted it @ $1.85 as I speculate that it will continue its way south but instead going south, it bounced, headed north and broke thru $2.00 per share.  As I have my stop-loss set @ $2.00, I follow my trading plan and bought it back @ $2.00.  So, by the time I got out of the position, I have the total realized lost of $810.75. 

I bought high (@2.00) and sold low (@1.85).  In this trade, I sold it before I have the stock, then I just bough it back to cover.