Wednesday, October 29, 2008

Investment Plan III

I'm a daytrader, I can go to swingtrading, but monthly investments....that will take time to get used to. The first trade is closed and will be reopened at a lower level. I really can't help it, but a 13% return on investment in 2 days is just too nice to be left floating around. Especially in an environment, where volatility is high and the downside potential is a lot bigger than the upside.


Still I learned quite a few things in this trade. And one is that you can't underestimate greed! I held off selling the Call, because I thought, if we get that 1000 point spike in the Dow, then 12$ on UYG will look shabby and I will regret having sold the 12$ call. I still had the order in at 1$, but there was never a realistic chance to get filled with the call trading 0.25 0.35 for the last 2 days. On the other hand I might get more greedy on the Put side. Not taking one that far out, but a nearer strike, which is priced higher. In case we rally I always can buy it back and resell. The 7.00 Put I sold went down 33% but it was still just 25$ as it went from 0.75 to 0.50 when I bought it back.

Now I will wait for the FOMC and reenter the market. Not necessarily in the Financials, but maybe in the Dow30 (DDM Ultra Proshares). And I actually might do it by selling the Put first.

It's an interesting area of trading, which really moves aside from my daytrading business, as it moves at a different pace.

Will keep you informed.