Monday, October 16, 2006

Buying back my Bund short, and selling out Intel...just taking profits:


Just bought my £15/tick Dec Bund future short back at 117.11, and sold
my £10/cent Intel long out, spot price was $21.60.

Booked £425 on the Bund, and £1,432 on Intel.

Sigh. I put the Bund on at about 117.40 average (that had the 10y Bund
around 3.78%), but the market did trade way above 118 after I did it,
annoyingly I 1) missed a higher entry and 2) didn't add to the trade
when the terms were better, despite my strong belief in it.

I still like this position, but think I'll get a better entry. Would
like it in bigger size also...my interest-rate positions are never big
enough! Having a CLOSE look at Dec '07 Eurodollar also, its pricing in
5% right now, think at some point the FED will move into rate-cutting
mode, and could cut pretty quickly especially if housing downturn
unfolds further. However, the last week or so it has felt like the FED
are on hold at 5.25% for a while, that the ecomony will continue to
strengthen, and that more hikes could be in order. So I'll hold off,
maybe at 5.50% I'll look to enter in size.

And sold my Intel purely because I've had a nice run on it, but also
because I'd like to have double the size, and so will see if I can get a
better entry level for a new position of more like £40-45k worth of
equity. Plus I think equity markets are due a bit of a setback (fingers
crossed anyway, I've taken a pummelling being short S&P and short DOW
11,500 calls!). Market is a little euphoric for my liking.

That's it for now, its getting late and cold here in London...its
reaching the stage where by next week it'll be dark on the way to work
and dark on the way home...how depressing, at least the ski season
starts soon.

Year-to-date P+L is up £16,500 at today's prices. Biggest losses have
been on GBP against USD which I'm still short and like, and on being
short US stock indices. Biggest wins have been individual equities,
Crude oil short which is now closed, and in rates, where I've generally
been betting on higher US rates earlier this year.

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