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Global Macro Trading Journal
- Thread starter Daal
- Start date
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
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 these might be more important than the statement, although they will probably complement each other
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 these might be more important than the statement, although they will probably complement each other
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 to get ready, and short the stock in the meantime (which would be sketchy as hell)who was the buyer of ackman's position?
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 thing? in my mind there is no enough info
I intially got involved because I was buying PSH shares at ~$20. But I wasn't comfortable with the size of the VRX exposure, so I mentioned that I shorted VRX shares to hedge part of the exposure. This was back when VRX was at $100. When it collapsed to $30's, that's when I covered the hedge and started to buy some outright. I bought some at 30's, 20s and high 10s. Prob $24 avg, so I lost $11 bucks a share (exit at $13) plus some call premiums (so, ~$12-$13 bucks a share) but had this worked, I would have made anywhere from $30 to $100+ a share.
There are a lot of stocks in the stock market that people think are going bust but then turn around and produce huge returns. I have been short selling for a long-time, I know there are more bankrupcies in the minds of shorts than there is in the real world. Just last year the shorts tried to convince the world that REN was going bust (back when it was $15). It reached almost $50 the other day, now it pulled back to $35.
If I made a mistake here was not implementing a better expression of this trade, perhaps only adding when the trend turned (a simple 50 to 200 moving average cross over) and sticking to calls before the cross over as a risk management rule
I had a small long exposure at $100 (thinking it was either worth $200+ or $0) and had it all the way down to $13. I showed in my position snapshots my exposures were around 1%-2.5% (outright plus PSH exposure). I think I probably lost 1.5% overall, but given that I was bullish at $100 all the way down, losing 1.5% its like a victory. Most bulls lost way more than that.
I'm actually short some right now (and kept a small call position), so perhaps I can make some back before this is over. I do know that the Ackman news is probably bigger than people think. I think he sees that there is almost no upside left in the stock but all the downside is there. So, the convexity (risk to the short) is gone. I will cover when it stabilizes in the coming hours/days/weeks
If someone sells an OTM option and it expires worthless, does that mean they did the right thing? in my mind there is no enough info
I intially got involved because I was buying PSH shares at ~$20. But I wasn't comfortable with the size of the VRX exposure, so I mentioned that I shorted VRX shares to hedge part of the exposure. This was back when VRX was at $100. When it collapsed to $30's, that's when I covered the hedge and started to buy some outright. I bought some at 30's, 20s and high 10s. Prob $24 avg, so I lost $11 bucks a share (exit at $13) plus some call premiums (so, ~$12-$13 bucks a share) but had this worked, I would have made anywhere from $30 to $100+ a share.
There are a lot of stocks in the stock market that people think are going bust but then turn around and produce huge returns. I have been short selling for a long-time, I know there are more bankrupcies in the minds of shorts than there is in the real world. Just last year the shorts tried to convince the world that REN was going bust (back when it was $15). It reached almost $50 the other day, now it pulled back to $35.
If I made a mistake here was not implementing a better expression of this trade, perhaps only adding when the trend turned (a simple 50 to 200 moving average cross over) and sticking to calls before the cross over as a risk management rule
I had a small long exposure at $100 (thinking it was either worth $200+ or $0) and had it all the way down to $13. I showed in my position snapshots my exposures were around 1%-2.5% (outright plus PSH exposure). I think I probably lost 1.5% overall, but given that I was bullish at $100 all the way down, losing 1.5% its like a victory. Most bulls lost way more than that.
I'm actually short some right now (and kept a small call position), so perhaps I can make some back before this is over. I do know that the Ackman news is probably bigger than people think. I think he sees that there is almost no upside left in the stock but all the downside is there. So, the convexity (risk to the short) is gone. I will cover when it stabilizes in the coming hours/days/weeks
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 think it will hedge my exposures the best
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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 stocks. My Fed futures trade is down but I got a lot of compensation in other stuff and I believe the Fed is leaning towards the side that will benefit the Fed funds trade down the line. Probably around June/July when the French election is over and the Trump policies are more clear. So I'm not worried, at this point all I need is for the central tendency to happen and that trade will make decent gains
Looking at my portfolio performance today (EWZ VWO and small caps up huge), I can't help to think that Fed futures are a cheap risk hedge. People are very skeptical about the Fed, into 2018. But I think they mean it and if they deliver on the promissed hikes, that part has value. If they do more (The Tepper scenario), it will make a lot of money