Quick Note on Thursday’s Trades

March 21st, 2008

WARNING: This is not a recommendation to buy, sell or hold any financial instrument.

I took profit on my FXF (Swiss Franc ETF) trade, not so much because I believe that the current dollar rally is real, but because I want to have some dry powder on hand in case I decide to get back into DBA (Powershares Agriculture ETF). DBA is collapsing nicely now. I don’t have a margin account, so I need to have settled funds on hand. Also, it was just a really good run on that Swissy, and nobody ever went broke by taking a profit (I keep telling myself).

I also bought some deep out of the money put options on XLF (Financial Select Sector SPDR), as the financials were rallying sharply. These are April expiration with strikes at 19. This is essentially a wild ass roll of the dice that the financial sector is going to have big, big problems over the next month. They were really shilling that piece of trash up on Thursday, so I pulled the trigger on some puts.

Posted in Economy | Top Of Page

2 Responses to “Quick Note on Thursday’s Trades”

  1. traderjohn says:
    March 22, 2008 at 12:26 am

    Dear Kevin – A suggestion on your XLF puts: you need to go at least two months out. Yes it is in a very strong downtrend but note the two-month cycle that has developed:

    http://finance.yahoo.com/q/ta?s=XLF&t=6m&l=on&z=l&q=l&p=,m100,b,m20&a=&c=

    It looks like we should expect the next low in May.

  2. Kevin says:
    March 22, 2008 at 3:09 am

    @traderjohn

    I always buy strikes that have almost no chance of being in the money. I just go for increases in the premium before expiration. I’m definitely not counting on these being in the money.

    Who knows… They could squeeze the thing up to absurd levels. With so much of the media claiming Apocalypse Now, etc. I wouldn’t be surprised if it kept right on rising.

Leave a Reply

You must be logged in to post a comment.