scriabin's ES, NQ, QG, and misc position/scalp journal

[ssternlight]

Energy Hedge Fund Runs Out Of Gas
08/04/06
Institutional Investor Daily-Hedge Funds

MotherRock, one of the largest hedge funds in New York to trade in natural gas, is unplugging from the industry. According to Crain’s New York Business, the HF, which had $430 million in assets under management after just a year or so in business, was battered in June and July by losses in the highly volatile natural gas market. In the past week, natural gas futures spiked more than 30%. In a letter to investors of the MotherRock Energy Master Fund obtained by Bloomberg News and Dow Jones Newswires, founder Robert “Bo” Collins, a former president of the New York Mercantile Exchange, expressed regrets for the “terrible performance and its impact on” their investments. Just how terrible? Bloomberg reports MotherRock lost 23% in the first half of 2006, with July producing “significant losses,” according to Collins. While the HF’s management has recommended the shutdown, it’s not a done deal; the board of directors has yet to vote on it. Last year, MotherRock did in fact rock, with net gains of 20% on its investments, reports Crain’s. Meanwhile, the New York Mercantile Exchange has issued a statement that MotherRock’s closure poses no threat to any “clearing members or other customers.”

 

[scriabinop23]

Quote from ssternlight:

Energy Hedge Fund Runs Out Of Gas
08/04/06
Institutional Investor Daily-Hedge Funds

MotherRock, one of the largest hedge funds in New York to trade in natural gas, is unplugging from the industry. According to Crain’s New York Business, the HF, which had $430 million in assets under management after just a year or so in business, was battered in June and July by losses in the highly volatile natural gas market. In the past week, natural gas futures spiked more than 30%. In a letter to investors of the MotherRock Energy Master Fund obtained by Bloomberg News and Dow Jones Newswires, founder Robert “Bo” Collins, a former president of the New York Mercantile Exchange, expressed regrets for the “terrible performance and its impact on” their investments. Just how terrible? Bloomberg reports MotherRock lost 23% in the first half of 2006, with July producing “significant losses,” according to Collins. While the HF’s management has recommended the shutdown, it’s not a done deal; the board of directors has yet to vote on it. Last year, MotherRock did in fact rock, with net gains of 20% on its investments, reports Crain’s. Meanwhile, the New York Mercantile Exchange has issued a statement that MotherRock’s closure poses no threat to any “clearing members or other customers.”

very fitting. I decided to take a loss on my ng.

sold 1 QG 7.27, (previously bought 8.06) - $1980 loss
sold 2 QG 7.14 (bought 1 7.50, bought 1 7.66) - $2200 loss

I didn't feel like losing any more on this trade. Frankly, I wouldn't be surprised to see gas in the 6.80-7.00 range on no news, looking at spot prices.

So basically I gave back all of my gains this week. What a tough contract. I'm not going to use the strategy of averaging in with such a large supposed gap in price. that was just foolish (8.06, 7.66, then 7.50). Looking back, it would have been wiser to just sell the 8.06 entry for a smaller loss if I anticipated re-entering at such a low level. In the end, no heat and hurricanes are what did me in.

Back to the drawing board. But a lesson learned.

 

[scriabinop23]

Here's the final entry for the week:

apple short scalps - $589 gain: ( sold short around 67.15 and 66.70, 400 shares - covered at 65.45)
apple 10 put scalps - $387 gain ( bought 10 sep 65 puts for 2.45. sold at 2.75 and 3.00)

previously Bought 100 AAPL 67.96 a few days ago to form part of a straddle (long story, but 3 days ago I bought 100 aapl, then bought 4 67.50 calls and 5 67.50 puts after I decided that it could go either way.) Sold 100 AAPL early morning 64.31 - $365 loss.

This was a strategic move before market open to leave 4 calls and 5 puts in straddle. I was anticipating a larger move in the stock, and wanted to not sacrifice my potential large profit from one of my puts from the loss from that 100 share block. This was all under assumption Apple would take 10-20 pt dip.

Last put will be worth a premium if Apple tanks now, at least.



Index futures: tough day for me. I was working on something else when market spiked up pre-open, and missed the entire thing. Thinking I'd follow trend, I bought 1 NQ 1534, sold 1 NQ 1521 - $254.60 loss

Then after the drop continued, I took the other side and recovered a little.
short ES 1286.00, cover 1 1283.00 - $145.20 gain

- short 1 QG 7.16 (technical trade following sharp selloff), cover 7.20, $100 loss

- Also bought 5 Aug 72.5 aapl calls for .60 each being impressed with showing of such strength. Worth .75 at close. Plan to hold on until at least the fed meeting.

natural gas killed me.. it was tough to give back all of my nat gas gains this week. like i said, back to the drawing board. i've decided not to be so liberal with my stops from hereon out.

 

[scriabinop23]

glad i closed out my NG position. that would have hurt if I kept in.

Did a little sunday night trading.


1. short 1 qg 6.93, cover 6.91 (was a little risk averse after last week understandably. just getting warmed up)
2. bought 1 qm 74.775, sold 1 qm 74.825 (same warmup, before I heard about prudhoe news)
news struck:

3. bought 1 qm 74.950, sold 1 qm 75.625.

Not bad for a boring Sunday.

Hopefully my Devon calls will do OK this week. I wouldn't mind scaling out of that position a little bit.

 

[scriabinop23]

This is not yet the journal of 3k/day consistent daytrader. I'd like it to eventually be - this is work in progress. I pray for a trending market... this is way too choppy.
not a great day....

Overall summary:

1) had plan to trend follow based on massive buying or selling of Nasdaq or S&P. Had 5 contracts ready to buy and sell for market orders at the click of a button. Entered on the massive volume, then exited and kept re-entering at reversals. Couldn't stick with the shorting, since my entries were to late. Basicallly $1600 loss.

2) at end of day, bought 1000 csco after earnings 17.71. That may make up for this schlock mess I did at #1.

3) did a few small trades here and there that didn't amount to much. took about $500 profit from misc oil and gas futures scalps and a KBHome short from the previous day, but my long options positions (mostly DVN calls) suffered quite a bit more than that.

Considering the energy complex is strong, I am hoping general bear market sentiment doesn't drive things down much. I'm hoping the flight is at least to value, and not away from the entire market. These are 50 Sep calls, purchased at 1.70 - now in the .75 range.. i'm holding out. Its a quality company and I wouldn't be surprised to see this back to 67-70 territory in a few weeks.

4) bought 100k euros, 50k at 1.2875 and 50k at 1.2795 - purely speculative play based off of fed pause. I'll be very happy to sell in a week at 1.2950.. This trade was not a scalp ... I'm not happy with the reversal, but that seems my luck lately.

 

[scriabinop23]

nice gap up today. everything is in the blue --- this may be the trending day I'm looking for.

again, tired of the choppiness.

after seeing japan's performance last night, i bought 1 NQ ... perhaps the rally day we are looking for.

 

[JimmyJam]

great journal

you got some good skills here, posting charts with your entries and exists could probably make it a more educational journey

later,

jj

 

[scriabinop23]

Quote from JimmyJam:

great journal

you got some good skills here, posting charts with your entries and exists could probably make it a more educational journey

later,

jj

thanks. Today I posted this which details my index trading:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=74622

This netted about $300 positive.

a. Sold out of cisco in early morning - that cancelled out my loss on yesterday's index fiasco.

b. had a fun time with natural gas, unfortunately not on the way up since I was so consumed with the indexes. Did two shorts. I have to go back to watching qg more intensively, especially at open -- my normal trading strategy would've caught quite a bit of that upsurge. I entered a nice trade after I saw the oil selloff. Nat gas was mimicking, and on the verge of selling anyway. So made an end of day from entry 7.80 (before the dip) and covered at 7.625. Net positive $480 for the day. I was a little fearful of buying early on, admittedly, because I did not have an understanding of the basis is of climbing .75 to peak. Looking for hurricane watches, etc. and found little. Some speculate it was high spot prices, overall energy complex buying, etc. Almost 11% up in one day. Only natural gas.

c. Bad trade / blunder of the day: bought 1000 X (steel company that makes steel for pipeline in prudhoe) at open, sold almost immediately for a $500 loss when I saw it free fall right after I purchased. Bad impulse trade. Got a little overconfident after that cisco deal.

d. sold off some APA 70 options near peak of the day that I had purchased 2 weeks ago. $734 gain.

e. bought some AAPL August 62.50 puts after today's *strong* showing by AAPL at open. This was amongst the first big nasdaq stocks selling off when everything else was still in the blue. Sold half of them at end of day for a $200 profit. Will hold the rest maybe til expiration. Also bought a few august KBH 40 puts.

f. Sold 50k euros before market open as well. they were purchased last night at 1.2795. I sold them at 1.2884. nice modest profit. I still hold one 50k position purchased at 1.2885.

 

[scriabinop23]

word on the street is natural gas' straight ride up (to 7.94) and down may have been attributed to Mother Rock hedge fund finally covering its failed short position.

Thats a big short position.