Tuesday, March 18, 2008

Follow the Bouncing Ball

Well, Gio has suggested for some time now to keep an eye on the VIX.

He also noted yesterday to position a few puts and a call hedge on GS earnings. Boy what a swing. I stupidly decided on not have a positioning IWM/JPM long puts at all on the Bear/JPM day.
What i SHOULD have done was add a call hedge using LEH or GS, which both carried equally DIRT CHEAP calls. against my long puts. But i assumed the market would slide downward at days end. Alas, yet another lost opportunity because of a wrong assumption.

Earnings carry such a swing these days that a strangle set cannot be ignored. The other missed opportunities iʻve experienced on both ends: FSLR, RIMM & MON calls while the market tanked. So, if iʻm going to throw some puts out there.. it doesnʻt hurt to buy a $10 hedge. After all i could win on both the hedge and the long put.

I wanted to buy cheap puts at todayʻs end if a rally ensued(which obviously did)... but my alarm was turned off by my wife... i am going to be sick if the market stinks it up tomorrow.

After all weʻre basically trading a bouncing ball... itʻll eventually go back down

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