Wednesday, February 08, 2006

A short-term punt...sold some DAX futures:

Right, today I have gone against principles and done the type of trade
that'll probably cost me the most...I traded something purely as a
short-term punt. Sold £5 a point of DAX futures at 5669 (its currently
at 5699).

There are a few rationales behind my trade, but the thing that got me
looking at it was an article in the FT on a Morgan Stanley research
piece which pointed out that we have gone one of the longest periods
ever without a 10% fall in the European equity markets. Combining that
with my general belief that ALL assets globally are over-valued due to a
prolonged period of excess liquidity, which is now being withdrawn
(through higher short-term rates in Europe/US and shortly Japan), AND
seeing commodities markets taking a beating over the last couple of
days, I thought this could turn into a decent little short.

So there you go...I've no firm belief in the trade and so am probably
asking to lose money...but hey-ho we'll see how this one goes. If we see
a 200-odd point drop, I may look at selling some OTM puts also. Lets see
if we can make 400 points = £2000 on this one.

On a side note, I just bought back a Google short which I put on last wasn't included in my blog portfolio as it was an old trade,
but Google is definitely one of the stocks I'll be back involved in, but
hopefully not taking the beating I took last year on it! Boy was that a
painful short, I was really freaking when that idiot (I forget who) put
out a $2,000 price target on it!


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17 May, 2006 07:29  
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17 May, 2006 12:28  
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17 May, 2006 12:45  
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17 May, 2006 12:58  

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