Trading Diary May 20th

MondayMay20th?

NameThatTradeGDX

Enis?

Goldandsilveraredownaround20and25%respectivelyin2013,largemovesforonlya5monthperiod?

Silverhasfallensofarthatitisstartingtolookinterestingasapotentialbounceplay,thoughtImabitwaryoftryingtostepinbeforeitshowsmorestability?

The$20levelonSLVwaslong-termresistanceformanyyears,andasaresult,itsanobviousleveloflong-termsupportthatshouldattractsomebuyers?

However,giventhesignificantamountofoverheadsupplyingoldandsilverattheselevels,IammoreinterestedinapotentiallongpositiononGDX?

Highimpliedvolatility,though,haskeptmeawayfromanoptionstradeintheETFfornow。

Read?

here

TuesdayMay21st:

TRADE:NTAP($36。

40)BuytheJul35/40/45CallFlyfor$1。

48

Dan?

AfterpreviewingNTAPsfiscalQ4earningsreport(here),withaneyetowardssomeoftheirpeersrecentresults/guidance,andactivistinvestorElliotManagementsrecentstakeinthenetworkstorageprovider,mysensewasthatfinancialengineeringwouldlikelybemoreofapositivecatalystintheneartermforthestockratherthanactualfinancialresults?

IchosetogetlongexposurewithaninthemoneycallspreadasIwasnotinterestedintakingriskfromavolperspective,but?

believed?

thattheneartermdownsidecouldbemutedasexistinginvestorsplayedagameofwaitandseewiththeentranceofthenewactivist。

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here

WednesdayMay22nd:

TRADE:FXE($128。

10)BoughttheSept128putfor$2。

60

Enis?

IhavementionedonseveraloccasionsinthepastcoupleweeksmybullishU。

S。

dollarstancefortherestof2013?

Thecommoditycurrencieshavebeenthefirsttofall,withtheAussiedollardownalmost10%inthepastmonth,andtheCanadiandollardown3%inthepastcoupleweeks?

ButtheEurohasremainedunusuallystronginthatperiod?

Asidefrommylongdollarbiasvs。

allcurrencies,IchosetheEurofor2mainreasons?

1)thecontinuedweaknessinEuropeanmacrodata;2)DraghissuggestionthatnegativeratesmightbeinstoreforthefuturefortheEuro?

EUR/USDwasrejectedfromtheall-important1。

30levelintradayduringBernankestestimony,andIanticipatethatwillbecrucialresistanceintheshort-term。

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here

ThursdayMay23rd:

TRADE:CMI($117。

05)BoughttheJuly115/105PutSpreadfor$2。

70

Enis?

IvehadCMIonmyradareversinceitsweakearningsreportonApr30th?

Thestockhasbasicallybeeninbouncemodeeversince,despitemorereportsofglobalindustrialweaknessonamicroandmacrobasis?

Ifinallydecidedtogetinvolvedontheshortsideagainafterthisweeksmajormarketreversal,thoughIboughtaJulyputspreadtogivemyselfplentyoftimeforthethesistoplanout?

Thestrikeselectionwasdesignedtotargetthe200daymovingaverageasmyexitlevel,currentlyaround106。

50。

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here

Action?

SoldtoCloseAAPL($444。

50)theJune385/435/485CallFlyat$24。

75fora$10gain

Enis?

ThiswasanicegainfromatradethatIinitiatedjustpriortotheearningsreportinAAPL,withthethoughtthatwewereclosetoabottominthestock,andimpliedvolatilitywasquiteelevatedconsideringthebuybackprograminplace?

Withthetradesappreciation,andstill1monthuntilJuneexpiry,Iwouldhavetowaitatleastacoupleweeksforthetradetostartappreciatingconsiderably,asitsmostlyatimedecaytradewhenitsitsnearthemiddlestrikeof435?

Asaresult,Idecidedtotakethetradeoff,andwillbeonthelookoutinthenextselloffinAAPLstockforanewAAPLtradethatisalsoshortvolatilityandlongdelta,butlikelyfartheroutinmaturity。

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here

FridayMay24th:

NameThatTradeTGT

Enis?

WhileTargethadabadearningsmissthisweek,andthestockwasdown4%onthereport,itactuallyrecoveredwellonThursdayandFriday?

Mylong-termviewonTGTisthatfundmanagersviewitasadefensivename,sotheyarewillingtorotateintothenameonweakness,particularlysinceitsvaluedmuchcheaperthanthestaplesandutilitiessectorsthatfundmanagershavepreferredfordefensiveexposure(healthcareismorereasonablypriced)?

AselloffinTGTtothe65-66areathatislonger-termsupportwouldprovideagoodentryforalongdeltapositionlikelyjusta3-6monthlongcallpositiongivenTGTscheapimpliedvolatility。

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