CFC - 24.8%

Just got out of my 1st stock CFC at 5.68.


CFC - Buy @ 4.55, Sell @ 5.68 (24.8% - 14 Mar to 20 Mar)

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!

First time on trading stocks (on Facebook!)

For those who don't know, this was the first time I traded stocks. I have never traded stocks before (mainly due to the low leverage level for stocks). And I didn't use real money; I traded using the Facebook Fantasy Stock Exchange (FSX).

Facebook is too 'outrageous'. They even have a stock exchange inside!!! Anyway, my equity rose 0.06%.

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)

14.3% MER options profit within 45 minutes & 5 pips from EUR/USD

Merrill Lynch & Co. (MER) recorded its biggest quarterly loss since being founded 94 years ago after the world's largest brokerage took almost $15 billion worth of write-downs from bad subprime mortgage bets.

That caused Merrill Lynch to post a net loss after preferred dividends of $9.91 billion, or $12.01 per share, compared to a profit of $2.3 billion, or $2.41 per share, a year earlier. Analysts—who have had a hard time ascertaining just how steep losses would be for Wall Street banks—had been forecasting a $4.93 per share loss, according to Thomson Financial.

Imagine -$12.01 vs. -$4.93. It's a big earning disappointment! I went into MER put options when the stock price was 51.25 and got out at 50.85 within 45 minutes.

MER Jan'08 50 Put (MERMJ) - Enter @ 0.70, Exit @ 0.80 (14.3% profit)

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Within the next minute, I also closed another forex trade on EUR/USD.


EUR/USD - Short @ 1.4683, Close @ 1.4678 (5 pips)

M&A in a volatile market

The market was very volatile yesterday. It started slightly in the red, then green a bit, and then red again. By mid-day, Dow Jones was up more than 100 points. But, DJIA finally gave up the gains (ended 55 points compared to Friday close) and break through its 13,000 support level!

Anyway, the trades were all about IBM acquiring COGN for $5 billion. Typically (but not always) the acquired company will gain in stock value and the acquiring company will lose a bit. But apparently, acquiring COGN will bring in great values and investors see this and shoot up IBM stock price.

Another good example of a 'win-win' M&A (merger & acquisition) is the recent BHP Billiton (BHP) and Rio Tinto (RTP) one!

COGNOS (COGN)
Straight ITM Nov-07 52.5 Call
Entry 2,25 Exit 2.50 (11% profit)
Day trade based on TCT

INTERNATIONAL BUSINESS MACHINE (IBM)
Straight ITM Nov-07 100 Call
Entry 4.00 Exit 4.50 (12.5% profit)
Day trade based on my 'revised' TCT

Anyway, I lost US$700 (for 2 contracts) on my personal account for GOOGLE (GOOG), since it dropped more than 100 points over the past few days. Fortunately, I don't trade stocks (otherwise, 2 lots x 100 points loss = $20,000!!!).

Winning Tuesday!

The night started red yesterday. I closed a position in the red for VRTX. But the market 'greened' up for me after that.

I had my first position in my managed account.

MASTERCARD (MA)
Straight ITM Nov-07 195 Call
Entry 6.30 x 2 & 5.20 x 1 Exit 7.20 x 3 (23% profit)
Day trade

But after that, I can't day trade in my managed account and thus, I traded on my own account as I see many opportunities in the market.

FIRST SOLAR (FSLR)
Straight ITM Nov-07 165 Call
Entry 10.80 Exit 11.80 (9.3% profit)
Day trade

MASTERCARD (MA)
Straight ITM Nov-07 200 Call
Entry 6.00 Exit 7.60 (26.6% profit)
Day trade

VALERO ENERGY (VLO)
Straight OTM Nov-07 72.5 Call
Entry 1.60 Exit 1.80 (12.5% profit)
Day trade

FOREST OIL (FST)
Straight OTM Nov-07 50 Call
Entry 1.50 Exit 1.65 (10% profit)
Day trade
This trade was exited on preset limit price, coz I was too tired to stay the night.

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 Google (GOOG)!

At the opening bell, I decided to get into Google (GOOG) today for one stupid reason! I think it will top the $600 mark today!

Indeed, it passed $600 mark before I switched on my laptop at 10.30pm (or 10.30am ET). I decided to buy an October 620 Call option (2 steps out-of-the-money) at when the stock price was slightly below $599 and it cost me $8.30.

With a opening bell gap up of $0.95 and fulfilment of The Chicago Trick slightly at around 1.30pm ET, I continue to hold when GOOG hit new high at 602.41, 602.90, 603.41 then 603.9496.

Time to go to sleep! At $603.51, I sold the position at $9.80 made a $150 profit (18% profit for my first GOOGLE!). GOOG continued to rally to the $609 region and the option i trade hit around $12.50 bid price.

Concluding NOV trade...

I finally concluded the whole trade saga on NOV (National-Oilwell Varco). Despite the whole hiccup on MB trading platform, I made a gross profit of US$1 (ya, it's only one dollar!). And after all commission and admin fee, most probably I lost a net of US3.05!

Here's the details of the trade:

(1) Bought NOVJY (NOV Oct 145 Call) at 7.80
in anticipation of the stock split of NOV (payable on 28 Sep and execution on 01 Oct) on Friday 28 Sep

(2) Sold NOVJY (NOV Oct 52.5 Call) at 15.00
Stock Split on Monday 01 Oct and I thought I profited US$720 (as posted here on Monday)!!!

(Note: I sold at a 'profit' on MB platform, since it's a green on my position window. But the symbol part was erroneous!)

(3) On Tuesday 02 Sep, I apparently got a short position NOVJY (NOV Oct 52.5 Call) and 2 long positions NOVJV (NOV Oct 72.5 Call). These 2 long positions should be what I had on Monday instead of the 15.00 NOVJY. I bought back the short position at 13.80 and sold one long position at 3.30.

(4) Sold the other long position at 3.31
on Wednesday only after MB platform recovered the options execution (Ya, many options were in chaos with all expiration dates wronged and no option execution can be done till 11am ET).

In summary, my gross profit is only US$1.


P/S: If you think you read wrongly, you don't. MB platform gone went all the time. The last time (about 2 weeks ago), I got lesser cash balance because of their system error. Fortunately, I always screen capture everything in trading!

P/P/S: I'm going to withdraw my cash asap and switch back to IB or OX or some other trading platforms.

Another Split WIN!

This time round, I profit from the stock splits of NOV (National-Oilwell Varco). I bought into it 'accidentally' on last Friday when I limit the price of $7.80 for the NOVJY (NOV Oct 145 Call). Despite the Ask price then was $8.40, it plunged to execute my trade at $7.80. And then, the call option closed at $5.50.

As always, stock splits will result in the stock price to rise on the execution date (which is Monday ET). I sold it off at $15.00, but the price continue to rally to around $16.00. (although the price rise shouldn't be this much!)

Great! Another stock split win - profit of $720 or 92.3%!!!

P/S: In case, you are wondering how come I claim only $720 profit instead of $950... The reason is the trading platform displayed a daily PnL (as mentioned, the option closed at $5.50 and I exited at $15.00) and hence a $950 closed PnL displayed.

First Straddle Win!

During the recent moody subprime happening, financial companies like Lehman Brothers (LEH), Morgan Stanley (MS), Goldman Sach (GS) and Bear Sterns (BSC) are expected to swing their stock price violently when they announce their quartetly earning report face-to-back this week.

Anticipating the swing of the stock price of Lehman Brothers (LEH) on Monday night, I entered the Straddle trade on Sep 60 Call ($1.90) and Put ($3.20). LEH announced their earning on Tuesday before market open and open with a gap up of $1.36. But surprisingly, both call and put options depreciated in value (call $1.55 and put $2.00) when market opened on Tuesday morning.

But I closed the put option when I see a steady rise in the stock price at $1.20 (ya, a loss of $2.00). And the great news was definitely the announcement by Fed chief to reduce rate at 2.15pm ET and the stock continued to rally more than $5 from previous close. At around 3.40pm ET, I closed the call option at $4.60 before market close.

No doubt the put option loses $2.00 of my bought value, it was the call option that brought me the glory by rising $2.70 in value! This resulted in a $0.70 profit (13.7% out of $5.10 that cost me on Monday).

Using Straddle strategy, it was the 'insurance' that I can profit no matter which direction the swing of the stock price.



Great! My first Straddle and first Straddle win!