A word of Caution - Greed and Fear

"The market may be unpredictable, but nothing beats you up than your very own greed and fear."

For traders out there, Control yourself. The market knows you very well. Whatever you do, the market will reward you accordingly. Nature could never ever resist your pursuit of freedom, as long you do it the right way.

What Happened?

What exactly happened?

I just happened to be away from the market and the whole market crashed like there's no tomorrow. I bought into 2 companies....

When there was a discount of 90%, I bought into Countrywide (CFC) last Friday at $4.55.

When JP Morgan announced that they would bail Bear Sterns (BSC) at $2 a share, I bought into BSC at $3.65 after the price falls $26 today!

THE SKY IS FALLING and here's the time to go in for the killing!

Another 25 pips!

US Stock market is not opened today. I went into forex during the US stock market instead.


USD/JPY: Short @ 106.07, Closed @ 105.91 (16 pips)
GBP/USD: Short @ 1.9469, Closed @ 1.9461 (8 pips)
EUR/USD: Short @ 1.4480, Closed @ 1.4479 (1 pips)

101 pips

Opening the new year with 2 forex GBP/USD trades...


GBP/USD - 1st Short @ 1.9797, close @ 1.9734 (63 pips - 106 minutes)
GBP/USD - 2nd Short @ 1.9755, close @ 1.9717 (38 pips - 21 minutes)

Payroll Time!

Yesterday, Payroll data rolled in before the market opened, reflecting a better-than-expected jump as the economy added 94,000 jobs in November. The data had many investors asking, what does the payroll data mean for the Fed?

When the closing bell sounded, the Dow Jones Industrial Average (DJIA – 13,625.6) tacked on nearly 6 points, a paltry gain of 0.4% for the session. Despite a scant gain for the day, the Dow added 1.9% for the week. To end this week on a positive note, the Dow overtook its 10-week and 20-week trendlines for the first time since the end of October.

The uneven stock market yesterday didn't provide good opportunity to trade options, but the payroll data did offer a good spike up for the forex players! It's good to be a options and forex trader at the same time.

Traders Cafe

I was discussing with some friends that how good will it be if we can have a traders cafe, where we can come together to trade together. As most of you should know, trading is BORING. So, it will be so nice where traders can come together and trade together. Hopefully it can open 24 hours and we can trade the US and FX market together!

Highly Volatile Markets

The market is too volatile over the past 2 weeks. Typically, traders and investors alike see market going up one day and trending down the other and call it a volatile.

To me, a volatile market is where the market is going up and down within the same day, just like this:

You can definitely profit from market like this, but the probablilty is lower. Whatever 'sensitive' news is brought to the table, who knows how the market will react. Stay out of the market like this. Take note of the market and take profits!

13 Retirement Myths

I realised the CNNMoney.com Retire Rich series will have this type of retirement (with money) articles every now and then.

Take a look at this article under CNNMoney.com Retire Rich. Personally, I totally agreed with some of the myths as mentioned:

#3 - Everyone has debt
#4 - A million dollars will cover you
#5 - Boomers will crash the market
#6 - Without a pension, you're doomed

After reading this article, I MUST have many many millions and MUST not have debt. I won't need any pension (or CPF) and even when the market crash, I can trade PUT options to win the market!

Market Crash

Did anyone know what happened to the stock market? Based on briefing.com In Play, this is what this was reported at 14:38 ET:

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Floor Talk: This afternoon's abrupt sell-off

The markets rolled over about a half hour ago, with the decline notable for the sharp sell-off in big-cap technology stocks. While there was some initial confusion as to whether something specific sparked it, it appears the following things could account for it: 1) a tier-1 firm came out with cautious intraday comments on the tech sector; 2) a different tier-1 firm came out negative on BIDU, which took down a host of momentum tech stocks; and 3) ECB governor Weber stated that, although the ECB had temporarily paused its rate hikes, in his opinion the ECB may need to raise rates to a "restrictive" level... Dow lost over 100 points in a half hour, Nasdaq lost over 30 points.

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Baidu dived from 359 to 301, luckily I'm not in this. So did many technology stocks (like GOOG, RIMM, AAPL, ISRG, etc etc) and investment stocks (like GS etc). Look at the index chart below and focus at the 'dive' portion from 2pm ET onwards.

But, I'm into a spread yesterday for S&P 500 (SPX). S&P 500 dived from 1,576 to 1,546 and I'm into this with the weekly options 1,555/1,570 Bull Put Spread. My maximum loss was supposed to be $6,600 and I converted it to a Iron Condor by having another 1,555/1,570 Bear Call Spread to offset the loss towards the last minute. The Bear Call Spread gave me $1,750, making my SPX loss limited to $4,850 (which is still quite high for me!!).

Market Crash!

My first RIMM!

On wednesday when RIMM (the Blackberry company) was at $95+, I decided to buy an October 105 Call option. It's 2 steps out-of-the-money and it supposed to cost me $4.40. I'm quite keen to get RIMM but yet, I'm unwilling to fork out $440. I set a limit price at $3.85 and went to sleep at 1.30am (SG time). Haha, the limit price was executed around 3.30am at $3.85.

RIMM is expanding into China, with 2 new great products coming into the market and with very strong stock momentum. On thursday, stock price rallied to close at $100.50 (a jump of $4 plus) in anticipation of the company's Q3 earning report after market close.

Industry estimate (based on Briefing.com) was 0.49 and RIMM reported 0.50 with upside guidance. On friday, the stock gapped up $7.19 on the opening bell and next, it passed the criteria for guaranteed profit as determined by The Chicago Trick slightly before 11am ET.

And me, I made a 136% profit (my highest in recent days) when I close the position $9.10. RIMM continued to rally to the $114 region and the option i trade hit around $10.50 or more.

My first RIMM!

Error on NOV splits trade!!!

This is maddening!!!

Today when I opened my trade platform, I got 3 positions: 2 long NOVJV and 1 short NOVJY.

And these were losing counters. I sold NOVJY yesterday for $15.00 to close, but apparently, this was an error. Today, the MB Trading platform revoked the order. And this became a short position. And the bought leg (from last friday) splits into 2, and hence the 2 long NOVJV.

I called MB Trading and they said I should cover the short position by the end of the day!! And I have to incur the losses despite their technical fault!!!

Let's see if the market reverse and how much I can salvage the trade. Maddening!!!