Friday, June 20, 2008

Three Bad Trades: Two (?) Down, One to Go

Last week I was in three bad trades on each of which I was down significantly. One was long NASDAQ futures, another short QQQQ puts, and the third long SPI (Australian stock futures via CFDs). I managed to close out the long NASDAQ position for a small profit. Tonight, I will close the QQQQ puts position. We will see if for a small profit or a small loss. I could have closed last night for a small profit, but didn't pull the trigger. The long SPI position is still bad, though no worse than it was. I guess I am resigned to waiting for the index to eventually go up, which is a safer bet when you're long than when you are short. I am learning, I hope from the mistakes I made on all of these trades. Otherwise, there are only a few bright spots - Legend International and Southwest Airlines are a couple of them. I took some profits in both of them. Another good recent trade is selling June covered call options on Interactive Brokers. I got $100 for two of the $35 calls just a couple of days ago and the stock promptly sank. I can't see it coming back to $35 tonight.

By the way, I think we may have seen the top in crude oil for a while. Last night's decline in the wake of the Chinese petrol price increases was pretty spectacular and certainly fueled the rally in stocks, which saved my QQQQ trade. If the downtrend continues, it will be the catalyst for the next upwave in stocks. At least in the US. Australia is another question.

On top of struggling with trading this month, yesterday I had a computer mishap when trying to back up my files. I lost a bunch of financial files or now only have the version from September last year. Luckily, none of the most crucial core files was affected. But I did lose my last couple of tax spreadsheets, including the one I have been putting together for 2007-8 Australian taxes. I'll have to reconstruct it from scratch. All the sources are intact at least, just a question of bringing everything together.


Anonymous said...

have faith - the ASX 200 has been bottoming around 5200, so going by that I would expect it to bounce at about that level. Also, don't forget there is going to be a lot of tax loss selling going on in Australia prior to 30 June (the end of the tax year). If you can, hang on for a few more weeks and a couple of hundred points.

mOOm said...

Very good point on the tax-selling!