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In light of new analysis by DayByDay and EcoQuant, plan on executing a small hedge to $EWZ trade.
Sell 5 6Jul $29 puts, buy 5 17Aug $29 puts for $.63 debit. That's $322 in capital used. The plan is to sell the $29 put every 2 weeks as long as we are in this area. Sell off the whole $EWZ position if $EWZ reaches $29
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The $USO trade from the newsletter is a little past delta neutral. This actually worked perfectly as I planned.
Sell it off as a credit of $.11, a gain of 37%. Yesterday's pricing was a little strange. Nice to see it normalize today. ALERT: Sell $TLT 115 calendar @ $.58 credit.
A quick retrospective on this trade: We initiated this trade 3 months ago at $1.41 debit. $TLT proceeded to obey and fall to a good target point. In the middle of the month, we rolled the short strike from May to June, creating a $.75 credit, making the total invested $.66. In the next newsletter, we sold half of the remaining position at a credit of $1.36 insuring a credit of $.70 profit. Last newsletter we sold the July Strike at $.33 giving the full position profit value of $.185 (since we sold half) profit, and now sold the position at $.58 giving a full position profit of $.29 which means the total profit for this trade was $1.175, a 83.3% profit. Hadik is talking about a spike in bonds. it may be a safe-haven type of spike, or perhaps a melt-up type of spike. Since I will not be long bonds in this fundamental environment, I will sit on the sidelines for a period of time. I am closing the $USO calendar trade at a $.25 credit.
We paid $.11 for it, so that is a 127% profit for this trade. |
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