Today's moves:
01/28/2008 15:02:21
Sold 100 XLF @ 27.7801
01/28/2008 15:03:16
Sold 100 IBKR @ 33.18
01/28/2008 15:06:33
Sold Short 300 SPY @ 134.3101
My Ameritrade account is now fully hedged. It still looks like sideways action is in store so I haven't gotten to short. Today the stochastics rose despite the forecast that they'd fall. I'm not surprised by that. It was going to take a major fall in prices to push them down today and I didn't think that likely with everything I've been pointing out.
You'll notice I did a straight short of SPY rather than use an inverse ETF product. This saves me margin interest. I don't know why the inverse ETF's are so popular. Of course it would be cheaper to short an ES futures contract, but that is more hedging than I need and psychological I like to see the hedge in the same account as the stocks it is hedging. That is silly but a lot of what I and other traders do would be silly to a truly rational profit maximizing trader.
1 comment:
I am not so sure that you are saving any money by shorting the ETF instead of buying an ETF with a negative beta. This assumes your broker is not paying you interest on the short interest proceeds at Ameritrade. However, institutional brokers pay it...and I think you would see it with many (all?) short ETF products. So, that interest may about cancel out the debit interest you would pay by longing the inverse ETF....and make it about a wash.
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