Monday, March 06, 2006

What We Are Doing

A quick recap of the day with some parting thoughts:
  • I am putting a portion of our fund's money into QQQQ puts and NDX-100 credit verticals. I am becoming a bigger bear in this market and I am putting our money where my mouth is.
  • We're doing similar things with Oil by selling more near-term verticals. However, I am also looking for overextended names to buy April calls. I do expect the action to grind lower with a tradeable snapback. Read my "Buy Premium!" article on how to game this.
  • We are also deploying long calls (April) into the Housing sector. I like KBH the most out of the lot but I expect more long delta/vol exposure to be added to our books in other names as well. Not calling a bottom here (especially if SPX decides to collapse) but Housing, being as oversold as it is now, will be less vulnerable (almost overlooked) if things get bad.
That's all for today. For those wondering why I haven't said anything about RIMM, here is a quick answer: it's pure alpha and is really tough to game. We sold some puts on it but we have no serious commitment. However, if it moves above 85 (quickly) we'll be looking at it again.

Finally, I expect the market to uptick overnight and maybe try a rally tomorrow. If you're with me on this trade, you'll be selling it.

Remember to manage your risk. In the end, that's the only thing that will keep you alive.



At 1:18 AM, Blogger TradingCourses said...

Interesting blog. I can see that you've done a lot of work on it.

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