Tuesday, June 06, 2006

Some new trades:


AS I mentioned yesterday, I added to my short in Crude Oil, selling
£7/cent of US Crude at 72.72.

Also, as I mentioned, I was wanting some impetus to take on the
anti-consensus long $ trade...was reading that HBOS strategists just
called for 1.12 year-end rate on the Euro, citing a slowing US economy
reducing the current account deficit...this is a view I also take, as I
view the US as entering a slowdown, whilst Europe/Asia continue with
decent economic growth...thus less imports to the US but continued
exports...everyone needs to buy more dollars!! Since my preferred trade
is still short the pound against the dollar though, I sold some Jun 30
ATM calls to buy OTM puts...specifically:

Sold 1.8600 call (jun 30) at 170.1 in £5/point (so taking in £850.50
premium), against buying 1.8200 put (jun 30) at 37.6 in £23/point (so
spending £864.80 in premium)...so a net flat trade that will work out if
we get a sharp fall this month. With the way markets have been moving
lately, I favour sharp re-pricings rather than gradual drifts.

Bigger picture, I want to position the book on the basis of a US
slowdown, and also try and turn stuff over a little mor actively...if I
am to make a lot whilst keeping the sizes manageable, it's the only way.

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