My Long Term Trades

I've been wanting to make more long term plays for a while except I can never quite lose the fear and I constantly look to see where the stock is trading at and that interfers with my short term trading. Personally I feel the general market is still in a down trend so I've been looking for things to short. Although, I do have to say that it does feel a lot more positive than before and it could be the potential of gov't stepping to help out the auto industry. There are a lot more political factors driving the market instead of just fundamental earnings. It's in a bit of a no mans land right now. I don't feel comfortable getting long when I can see some clear resistance meanwhile there's no point getting in front of the train trying to short. Because of this I've only taken some very small positions in my long term trading account.

I shorted ITRI on Monday after it shot up. It looked through out the day but it got pretty painful in the afternoon when it made another up move for couple of points. It did look like the sellers came back into control on this stock and the general market so I figured that I'd hold on to this and if it doesn't gap down the next day I'll cover it. Fortunately it did gap down the next day, except I was late to the office so after things turn sour again I covered it for a much smaller loss.

On top of that equity short, I actually sold some naked call options as well for the 60 strike price. When it looked like it wasn't going to work out I covered those and lost about $75 total, which isn't all that bad for my first option trade. The reason I said it's not bad b/c it could've been totally disastrous. I sold naked calls which means my risk could be unlimited. Also on top of that I didn't quite consider the time to expiration and how much this ITRI could move. I was only looking at the short term chart, which I do believe is going to consolidate here but surely a 10 point in a day is nothing surprising for this guy.

I actually got a call from the Pit on Friday asking about this trade and what my rationale was. I was really looking at this as three separate trades, the two options contracts I sold and equities short and I've calculated the amount that I was willing to lose. Obviously somebody in the backroom thought I was taking on too much risk and I don't blame them for thinking that; I thought so a little bit myself, which is why I covered my positions. Anyway, I need to be more careful with time to expiration and a stock's delta if I'm trading options from now on.

MELI was another short I had and like ITRI I looked for reasons to stay in the trade but I eventually covered it for a small profit after it hit my pullback. I got into CX short and it looked really good until the next day that I covered before it went to a new high. Sadly Wednesday, CX came out with negative news and drove the stock down. I got into HURN and it's the same story... hold on as long as I can but eventually cover for a small profit after a pullback.

I'm glad I took these trades b/c I'm applying the discipline of defining my risk reward prior to getting into the trade and adjusting my pullback as the trade goes in my favor. I got into small positions just because I don't want the P&L to affect my other trading and the market isn't quite setting up like I'd like. I don't know if there's a particular reason that I've traded almost all Nasdaq stocks in these long term, it's probably just b/c they're what came across my tickers at the time.

On a slight side note, I've been somewhat whining about the fact that I paid for a new monitor right before the new policy go into effect that if you yahtzee you get a second monitor for free. Well, another way to get a monitor for free is if you hit certain profit level. I was almost there so I sent in a request anyway and I was very happy to see that it got approved. Starting sometime next week I hope, I'll be trading with three monitors. I know the Pit is trying to get me set up so that I could at least see options quotes, which will be important come expiration date on this coming Friday. I plan to use my third monitor for options but other than that I'm not sure...

A friend of mine that's been trading part time contacted me about Kershner and we went out to lunch on Tuesday and I showed him the floor a bit afterwards. Funny enough another guy just messaged me on Facebook. I'm getting close to the HP status and I hope to earn the trust of the company soon to allow me take on students but that's probably still a good 6 months away. However, if I do have friends applying to Kershner at that time I sure would love to have them on my team. It's a bit of a wistful thinking at this time but I'm definitely making it a goal to improve my trading, make more money, and become a coach.

It's only December 12th and I've already met my profit goal for the month. Let's kick some ass the rest of this month, finish out the year strong, and build momentum heading into 2009. There's a Fed meeting next week. Happy trading!