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!

 

 

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.

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!

 

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 ?
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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.

 

Some of my friends emailed me about LuckySpeculator.com and told me that jump right into options trading in day1 was a bit too fast for them and that they can't real follow what and how was I trading.  They also asked me to explain what "long" and "short" mean #$%*@#@ (Are you kidding me? )  well, so in light of this, I am going to slow down, just trade stock at this point and explain what short and long mean.

Simple put: long = buy and short = sell.

Long is easy to understand, as we are at buy side as consumer most of time, it's not difficult to understand why we want buy something we don't have and maybe sell it at a later time.

However, short can be a bit confusing.  so, let's use today's trade as an example:

I shorted 5405 shares of NFLD @ $1.85/share today, it means I sold 5405 shares of NFLD.  So now, you may ask me how can I go short on something I don't have?  Well, the answer to your question is: I don't have it yet doesn't mean I won't have it in the future...  so my question to you is in which direction do you think I am speculating NFLD will go?

And if you still don't get it, go STFW !

 

 

The name of this website is LuckySpeculator.com and in my previous blog, Why Do I Feel Lucky All The Time..., I kind of went thru my view on the term, lucky.  And today while I was doing some reading on futures trading, I came across what I think is a great defintion of the word, speculator, and here is what it says:

"Commodity speculators get blamed for many of the economic ills that befall humanity.  Speculators cause runaway high prices and prices so low that agricultural prodcuers cannot survive...." blah blah blah and then it point out: "Most of these accusations arise from a lack of understanding", very well said and here comes my favor part: "A futures market without speculators would be like a country auction without bidders - and would work just about as well.  In most markets, speculators are many times more numerous than any other participants.  It is the speculators who create a liquid market.", wow!  The term speculator can't be defined any better than that!

So now, let's remember: It is the speculators who create a liquid market!

$$$$$$$$ 

 

~$80 per barrel of the US benchmark light sweet crude!

The raise of crude is in parallel of the raise of other commodities and as prices increase, there are traders who come and cause upward momentum in the prices of other commodities.   And as China has become a major factor in commodities prices as she has shown that is not able to satisfied its own growth demand.  From producer, China becomes a conumer and this suggests that there could be a boon to US and other commodities producers.

I will keep my eyes on the agricultural sector 

 

$$$$$$$$$$$$

So, here are my current open positions after day 2:

Long 100 BABT.X @ $5.50
Short 100 BANS.X @ $6.20
Long 50 EUQDI.X @ $2.85
Short 50 EUQPF.X @ $2.35

And following is the first P&L after mark to today market closing price:

BABT.X option closed @ $6.00 has unrealized gain of $5,000
BANS.X option closed @ $6.20 no change
EUQDI.X option closed @ $2.90 has unrealized gain of $250
EUQPF.X option closed @ $1.95 has unrealized gain of $2,000

A total unrealized gain of $7,250.

I'm doing well.  Let's see what tomorrow brings!

I thought putting together a trading plan would be an easy job but I was so wrong!  After all the readings I have done surrounding the subject in the past few days, I soon realize that creating a trading plan is not a trivial task! 

For anyone who is serious of becoming a professional trader or even just a good one, then a good trading plan is a must have.

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So I continue on my quest searching for good reading materials to help me to create a good trading plan for the LuckySpeculator.com project.  And in the process of doing so, I came across the following quote that I would like to share...

“Luck is what happens when preparation meets opportunity.” - Seneca

“I feel that luck is preparation meeting opportunity.” - Oprah Winfrey

then these two quotes reminded me the movie Titanic and what Caledon Hockley character said in the movie: "a real man makes his own luck" or something like that.

Well, I guess all of the above can help to explain why I feel lucky all the time...  First of all, what can I say... I am a real man! :) and second and utmost important, I am always prepared!  :)

There is an old saying in business: "Fail to plan and you plan to fail."! 

So I took a one-day options trading class few weeks back and one of the thing we did in the class was the option trading simulation.  Before the simulation, the class did an example trade and knowing me; I went all out and max my allowed trading limit and at the end of it, when I expected to win the most, I lost!  

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