Tuesday, July 24, 2007

New Trading Strategy Working So Far/"Subprime Woes"

My new trading strategy is to hold a minimal or small position overnight (currently equivalent to 1100 QQQQ shares) and to increase my position only when I am actively looking at the market. The previous strategy was to hold a larger overnight position and only to hold the minimum position during regular trading hours when I wasn't available to trade. This was the so-called "overnight trading. Recently I haven't been feeling confident enough to do this. Well, I did make money today going short in a mostly up-market. So that's a good start.

Some of my investments are now not looking like such good ideas. Specifically (there are others :)), Newcastle and Hudson City Bankcorp. The idea was that these were two of the better real estate investments and I would hedge them by shorting IYR in a "pair trade". The bottom line is the hedge has been insufficient. The main question concerns NCT. Is it likely to implode like the Bear Stearns funds? Or is the selling overdone? Is it a buy, hold, or sell? I don't know.

1 comment:

Adventures In Money Making said...

i guess going long SRS might've been a sufficient hedge!

i sold naked August $79 calls on IYR on monday. they're pretty much down 80% now!!

but like you, they weren't a sufficient hedge against the rest of my portfolio.