Trades

so my real trades:

Long citi group july 4.50's @ 0.15, currently 0.18.

Long Citi group july 5.00's @ 0.03, currently 0.03.

I think the bullish run is going to go into the 1:10 reverse split, then retrace, but I am looking to get out before that...looking for 4.70-5.00 and ill be happy.

Demo:

Long cocoa (ccn1) 3188, current 3340 so +152 or +4.76% (playing for 100$ a point).

My trailing stop is currently at 3112. Following ichimoku on this one.

Cocoa!

I am showing 3341 for Cocoa right now, I went long at 3188, so I am +153 points :)

Cocoa Futs

Ok so seeing how most other commodities are already in the sort of trend that is inflation (Lean Hogs) or deflation (random sized lumber) you are left with the middle group, which are stuck in a channel.

Luckily I checked out Cocoa Futs. Check the pic:






Ichimoku is about to cross daily chart, with chickou span also agreeing. I put an order for 10 contracts in (demo obv.) and we shall see how it turns out!

Volatility Arbitrage

Saw a video on youtube about Volatility Arbitrage from Paul Wilmotts book.

Interesting concept.

Essentially you create a volatility model, compare it to Implied volatility of the option, and then buy/sell the option, using an automated system to remain delta neutral.


I understand some of the math, but really need to learn more on econometrics.


Debating taking Calculus and Probability theory this summer instead of German...we shall see..

Canada

Apparently you cannot do spreads in your tfsa.

I can trade options in my tfsa, but cannot do spreads in my regular account because I do not have margin account because I do not have 25k in there...fml

what is the point of being a small time investor if you have nothing but hardship.

May 2011 AIB options

0.50 AIB option listed at 0.10/0.15, brings effective buying price to 75$ +comission...so 86$. Market is trading at 3.13...exersise and sell for $227 profit...


volume is 1400/1 for bid/ask...sooo unsure about this one. Got a quote from my broker, quote said non standard delivery...so going to figure out what that means this weekend.

options

so I went long Citi today

4.50 strike
june 2011 expiration
$0.15 for the trade

currently +0.02 or ~+13%

commissions are not even covered yet, simply because the size of my trade...I can do larger trades, but felt starting with one contract was best.


edit:

my Greeks.
Theoretical Value: 0.28
IV: 20.548
Delta: 0.571
Gamma: 0.645
theta: -0.002
vega: 0.007
Rho: 0.004

Looking for opportunities

Currently I am looking to start trading stock in 1 contract sizes, not having any luck though.

Starting to think about strategies now more than market conditions.

Forex Option mispricings between OTC and Exchange listed Options

OK so here is what I found (with real numbers)

EUU Rate: 144.90
EUU june 136.00 2011 options: 9.05/9.15 or .0905/.0915 to keep both in standard form

Eurusd rate: 1.4490
Eurusd june 1.3600 2011 options: 0.0887/.0895 or 8.87/8.95 in EUU form.

Now as I recently found out, EUU is cash settled, so from what my understanding is, you basically are paid the difference between the price of the strike and the current market price when it expires.

too keep it standardized, ill switch to cash value.

EUU option value must = 125 000 to match 1 contract eurusd

SO if each contract of EUU is 100 shares of 100 multiple of the eurusd rate, then each contract is 100*100 or 10 000. So 12.5 contracts will equal 1 eurusd contract.

So
you buy 1 eurusd contract for 0.0895*125 000 or 11 187.50$

you sell 12.5 EUU contracts for 12.5*9.05 or 113.25.

On expiration the price drops to 1.40 from 1.4490, you are long eurusd at the market rate of 1.36 (+4000$). You gain the premium from your option (113.25$) from the premium, but lose the profits from your long position on the cash settlement.

So you have:
-11 187.50
+113.50
+4000
-4000


Thus you lose money...I maybe wrong with the ISE FX contract size/value, but looks like thats what it is...unless you do .0915*125 000 you will get 11473.50$, in which case you net 250$....SOOOO I dont know...its 230am, i am tired but cant sleep, this is the best i have for right now....

Investment Law

ok so I have an idea I want to talk about, but not really sure if its plausible in the eyes of the law (hedge fund law)so going to do some reading then I'll write it up here.

Basically has to do with charitable donations, tax law, and seeder funds.

if you can draw the lines, good for you, but just doing some reading before I post more on this.


Realized a lot of the posts this year haven't been like the past. I have been terribly busy lately (starting to lack sleep) trying to balance work, education, gym, and my own personal research (ok and a little research on how beer affects the body once and a while). Will try and work on making the post more argumentative and all around more meaningful to you readers (over 1200 of you now :) )

Canada

Saw a movie on the death of the Avro Aero the other day, made me start thinking about a few things.

Does Canada still stand for what our forefathers fought for?

We used to stand for innovation, and bravery when things got tough. Now all we stand for is status quo and whatever is simply good enough.

Nobody want's change, everyone is happy with status quo...

The liberal left in this country holds us back from greatness. There is ways to achieve socialism through capitalism, in a way which makes it beneficial to all parties, yet everyone demands something for free. They no longer think about the country as a whole, or the greater good of the nation.

anyways, big rant that has been building up for a while. If it doesn't make sense that's ok with me because its simply a rant.