Friday, December 15, 2006

Equities killing me...but I still believe...buying DOW Puts, and Dec '07 Eurodollar

P+L update this weekend.
 
My Dec DOW Put/Call rolled off (I had bought 11,000 Puts and sold 11,500 calls)...wow. Down £10,000.
 
So this time, I'm just spending money on the Puts, so at least I know my downside. Buying Mar '07 DOW 12,000 Puts, at 122 in £10/point.
 
And following CPI today coming in at 0.0%, it looks like the FED has done its work, overdone the hiking cycle as usual, and should embark on some serious rate cutting next year. So I'm buying Dec '07 EuroDollar at 95.225 in £100/bp. Lets look for a 20bp move higher then re-consider the position.
 
 
That'll do for now. Over the next week or two I'll be shuffling the portfolio around and looking to position for next year. I also want to discuss my trading style, I'm not happy about a couple of trades from this year, I think the use of stop-losses is necessary. Possibly combined with a mandatory week out of that particular market!! For example on stocks, I just didn't want to lose my position, but losing £10,000 on more than one trade is a sure sign of bad trading discipline.

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