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Posts tagged ‘Hedge (finance)’

Trading with Machholz up-date

Stock UP-date

BAC

For those of you who have been trading with me I suppose a hardy congrats is in order as we are now almost 100% up on my buy recommendation( Buy BAC at $7.10)  and this is taking into account all of the costs of hedging our positions over the last 12 months. The cost of hedging has in fact shown a 150% plus profit and so has not cost us anything. Where do we go from here? Remain hedged, as we can expect a lot of volatility in the coming months but “the trend is your friend “and as the stock climbs we can sell calls to pay for the hedging and then when we are in profit we can then continue to accumulate put options covering our exposure and profits, this system has been very good to us and there is no reason to make any changes.

To-days news regarding the earnings was no big deal except a breakout into a new trading range $14 to perhaps $16 but we were hedged just in case and will remain just bring on up the hedging with some of to-days profits.IE Roll the put positions and remember to buy way in the money puts $ first $ 15 and if the stock continues to advance then roll into the 16 etc the mirror call options are making just as much profit as you are losing on your put options and so you keep all the stock profit as you continue to trade through the year .end of year target is still $16.50 to $17.50 and end of next year should bring us nicely up to $21.50.

Good trading and remember always be Hedged!

Want to learn more?  Then take a look over at one of our recommended  excelent educators in this field  http://www.wealthbuilder.ie/

Thomás

Trading with Machholz

Well those of you that were waiting for our first instalment of up-dates on my trading I have the current January trades to announce.

Dec : Entered 3 contracts  (calls) on the 5 and 6$ BAC these were Jan Calls and we were under water for the last two weeks with losses of 1200$

As of last Friday sold out of said contracts with a net gain of 89% on one contract, a 37.5% net  gain on the second contract and a break even on the third contract.

Reason for sale .The approach of expiry (never hold options up to expiry)

Entered 2 Feb contracts BAC( puts) at the strike of 5 and 6$

Currently under the water but will be averaging down in the next few days as I believe we will have a catalyst by way of earnings we are gaining as the stock price goes up and we should be able to make a few bob as the stock retreats back on or before earnings .Either way we have until Feb. 15th to be able to make on the puts .

Bought 500 shares of BAC at $5.01 .Current price is 6.20$.

we are heading up to the top of the current pivot point around 7.50$  before a return to test the recent lows  (4.91$) In any case I am Hedged and so I only need the stock to move to make money ! If we get ther before the expiry date in Feb, I will treat myself to a trip to Paris !T

Overall profit target for January has already been achieved.

I hope to announce the start of a new trading course in the coming months for my German Friends.

Golden rules to keep in mind!

As always wait for the market to present an opportunity.

Don’t just place trades because you think you should be in the market.

Capital preservation is paramount.

Never put on a position without been Hedged.

Give yourself enough time to become right.

Place small trade amounts that will not break the bank

Remember you may have to wait to get a better pricing for your hedging so have at least the same amount value contracts as you have in chosen asset.

Use only in the money options

Watch volatility and remember you need to buy low volatility.

Buying options is like buying ICE they waste away in value from the moment you buy them.

For my system to work you need to have a volatile oversold asset that you want to buy and hold for at least two years .So our up and coming course on (An  Introduction To Technical Analysis )would be a good start for any would be trader !

Machholz

Bondholders must be “Hedged” so why are we still expected to pay them out in Full??

 

I was on East CoastRadio  this morning  and I revealed that any bondholders worth his salt  must have had insurance against any loss on their positions (they must have been hedged”)

here is a video on one such hedging tools and there are many one can take out on any number of assets or positions

So why are the main political parties still insisting in bailing them out to the full value of their positions when in fact they are covered for potential  losses and if they haven’t taken out hedging then the Politicians want to still pay someone that has no insurance on his car or house so to speak !

This is just stupid and sheer madness.

Message to the voters of Wicklow the bondholders are covered and we do not need to bail them out, default now .

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