Thursday, January 04, 2007

Close shave for warrants...made $130

Had a close shave today..phew

What a suprise that dow closed only +11. When I slept, it was still hovering around 100 points. A turn of events when fed released their minutes. Hmm... It turns out to be a red red day, except nikkei. STI dropped substantially, almost all the stocks in my watchlist are all negative. My holding stocks included. Longcheer reached skyhigh to 1.35 before falling to the present 1.28. Only one that stayed the same is yellow pages. Not suprisingly, because yellow page is not active too when the bull runs.

The close shave was to do with my warrant trading.

Trade 1: Buy 10 lots at 0.805
Trade 2: Sell 10 lots at 0.820

Trade 3: Sell 10 lots at 0.830
Trade 4: Buy 10 lots at 0.810

Trade 5: Buy 10 lots at 0.735
Trade 6: Sell 10 lots at 0.73

Trade 1 and 2 was the standard buy first, then sell. Trade 3 and 4 was the unusual naked short. What I did was to sell 10 lots at 0.83 first, then go on to buy back (cover back) 10 lots at 0.810. This is the first time I did naked short successful. Previously, it was 100% failure rate. Not too bad eh?

TAKE NOTE: Naked short actually reduces your trading limit for buy and sell by the amount you traded. I didn't know that and it caught me off guard. It resulted in me unable to average down to catch the bottom, nearly did me in today.

The close shave was trade 5 and 6. If you notice, I mistook a signal to buy and went in to buy 10 lots at 0.735. However, the price nosedived sharply. I should have known not to buy! I was already decided to quit for the day but I was tempted to go back in. I had to pay the price for this lack of discipline. Luckily it rebounded slighly back up for me to sell off at a slight loss. Murphy's law happened...dbs hung up on me! I had to spend the next few minutes frantically hoping that I can still sell before it nosedive another round. Luckily all went well and I managed to cut my loss for trade 5 before it got worse. (It did got worse, now hsi dropped 400 points - if i'm still holding my call warrant, bye bye)

Looking at how hsi jumped down really frightens me. Better not get cocky next time and stick to my plans! Had enough for today, not going to trade anymore, for sure! Made a bit from my warrants, $130. Could have made a 100 more, if not for trade 5 and 6. But that's the fee for not being disciplined.

Even as I type, longcheer is spiralling down. But I have no fear for it, cos I heard some fund houses buying longcheer. Married deal at 1.28. So the closing of longcheer today should be somewhere around there.

A very very red sea everywhere. Dow futures is flat, after losing a slight gain just now. Could the inevitable be here now? Somehow, I still don't think so.

I'll update my total returns later tonight, as of now, it's $1,210 (due solely on longcheer losing 0.040)