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Fed 2018 central tendency fed funds projection went from 1.9-2.6 to 2.1-2.9 (median stayed at 2.1). They removed 'only gradual' from the statement (raising the chance of a 50bps hike). Front end got hammered but Brazilian and EM stocks soared, so did gold, bond and gold stocks, also small cap...

I also purchased Jan 2018 IEF puts. but that is more of a speculative position.

I'm buying IWM puts (May and June) today. This is part of my tail hedging approach of giving away a certain % of my equity premium as insurance against big downside moves (I'm aiming at 0.5%-0.75% max annual budget there). I might use other things rather than IWM in the future but for now, I...

With regards to my VRX trade, which mistakes I made? And could I have done anything differently? Its tough because it was a convexity bet, often they wont work but it doesn't mean it was a bad decision. If someone sells an OTM option and it expires worthless, does that mean they did the right...

I'm not quite sure how these block trades work. Jeffries was supposed to have executed the trade. But if they got in at $11, they will lose money selling today as VWAP is 10.82 and it sure to go lower. Perhaps they have other clients (or want to be in the other side) or they ask for a few days...

Important Fed numbers to monitor in the decision 2018 median Fed funds projection. Current: 2.1% year end. Central tendency 1.9-2.6% Long-run median Fed funds projection. Current: 3%. Central tendency: 2.8-3% Long-run GDP growth projection. 1.8-2% Long-run Unemployment 4.7-5% Changes in...

Congrats to shorts

I will probably keep some as short actually, this is similar to JCP and Borders. Both cases when he exited, the stock went quite a bit lower from his exit price. He must really not see anyway the shareholders can benefit as debt gets renegotiated and lenders keep asking for more and more

So that's why Ackman didn't rebuy his VRX sells from December. He was getting out. Good thing I exited long at $13. I put a small short after-hours now to hedge my calls. Will cover when stock finds a bottom

"Would major exporting countries retaliate in other ways? Would this start another Smoot-Hawley tariff war? Hardly. At the time of Smoot-Hawley we ran an unreasonable trade surplus that we wished to maintain. We now run a damaging deficit that the whole world knows we must correct. For decades...

Why not just sell the positions that are being 'hedged' by these counter trades? Because that is a recipe to watch something rise 10-100% for years without you. When you go to cash and the thing keeps rising, you tend to just watch instead of getting back in (especially if you got to pay more...

Brazil could tank on global risk as well (so I would lose on Fed futures and on Brazil bets), so that's my big risk. A Le Pen win or Trump getting killed or something like that. So that's what I need to monitor going forward. Perhaps an idea is the purchase of way OTM puts on indices Spitznagel...

Brazil also tends to get spanked when US yields rise. So, this trade not only protects me against a collapse in Gold, US bonds but also helps with Brazil risk. So its important to take that into account. If I'm wrong, Brazil will do great, so will gold and gold stocks. If I'm right, I will make...

In terms of size, if my resonable risk scenario plays out, I lose 0.75%. If my resonable win plays out, I win a little over 1%. I could make or lose more depending on the tails but hopefully my risk management will kick in and I wont lose more than 1% This is a small bet relative how how I used...

The Fed's own 'central tendecy' projection for 2018 end is for a Fed funds at 1.9% - 2.6% with a median at 2.1%. Range is 0.9% - 3.4%. 2.1% median vs 1.82% market pricing So the market offers value if the Fed is right, I think there is a fair amount of 'risk premium' embedded in these contracts...

I'm now short late 2018 Fed futures. The Dec 2018 contract is pricing in a 1.82% Fed funds by year end 2018. That's 3.6 rate increases (not considering the March, which is pretty much a given at this point). My resonable downside risk should be 2 hikes instead of 3-4, in that case I lose 37bps...

Sure. That's why I say duration is almost the same as the stock market in Brazil. They tend to move together. Stocks also bottomed in early 2016. Brazil biggest macro manager (that has a strong track record) is saying in his latest letter that he thinks rates still need to go lower (I agree)...

On VRX, I recall Monish Pabrai talking about one of the refiners that he bought (can't recall if it was TSO or VLO) at $7 and it went to $1 before turning into a 40 bagger or something like that. Also LVS in 2009, VALE and PBR in Brazil recently (and commodity companies in early 2016 in the US)...

You could be right, I got played like a rookie in getting into the trade. This thing might pop hard unless the fed drops the hammer. Draghi said something about risks being to the downside but growth risks being to the upside, to me this sounds like a man who will raise rates. This week I did...

I closed EUR short on this Draghi conference. For the near term, it looks like the surprises on Europe could be to the upside, unless the fed comes out and say they will hike a lot. but in that case I will make money on Fed futures and short bonds, so no reason to expose myself to upside europe...