A few new trades: ZB, CSCO, KMP

I've been very passive with trading/investing lately but I'm back at it full time as of yesterday and looking forward to it. I started things off good with what turned out to be a quick trade. I shorted (1) ZB yesterday morning at 127'20 and covered in after hours at 126'22 for a gain of $933. Minimum tick is 1/32 at $31.25 so each full point is $1,000. I decided to short after seeing the largest while candle in the last three months that looked to be nothing more than a little panic flight to safety buying as equities shed 1.5% that day. I will look to enter again with a short if there is any short-term strength in bonds. Meanwhile I have been short a ZB 133 call for November which is set to expire worthless, and I'm short a Dec ZB 130 call.

I am going to spend the next few days finally rebuilding my spreadsheet I accidentally lost with all my trades going back to summer of 2008. That is the time frame I made the jump from primarily investing long-term with covered calls to different types of short-term options trades. I'm looking forward to seeing and analyzing the results.

ZB

CSCO

I sold Dec 19 puts on CSCO for .39. After the recent sell off it left this stock at its lowest price since the MAR09 bottom. I'm comfortable owning this stock long-term if put to me so there is no exit point to this trade.

KMP
I was short NOV 67.50 puts that are to expire tomorrow so I rolled this trade to DEC 67.50 puts at a net of .52. With a 6.3% dividend yield I think this stock has a floor in it not too far from current price. In a world chasing yield this is a low risk stock with a long-term track record of stable and growing dividends. I am willing to own at a cost average price of $67 so there is no exit point for this trade.

Comments

WOW! I think that sums it up

Many of you have been reading this blog may have noticed that my blogging frequency has increased over the past few weeks as I got short the market. As you can imagine I am down money since getting short the market, this is the time when most people pull away from posting. But my goal is to stay active and involved and show you that trading is not always rainbows and butterflies. It is times like these that the things I have been sharing over the past couple of weeks are so important. You need to trade small relative to your account. I have a decent short position in the market and my portfolios are set up to make some awesome returns if we finally turn lower. But something I would like to point out is that my account is 70% Cash. I learned a long time ago how important it is to live by the rules you preach. Because of my discipline I am able to continue to hold my positions, I have time and capital on my side. I can't stress enough how important it is not to get to big....

Stay Small, Stay Out of Trouble

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more good news from FXStreet : Tom Fitzpatrick, senior technical analyst at Citibank in New York. Monday, July 15, 2002 "Parity is a psychological, not a technical level...and whether we pause around parity or not, we are likely to see significant further dollar losses...Our initial target is $1.03 to $1.0450. If that level is taken out, it actually casts a question mark against the whole of the dollar's rally of the last seven years, and could open up a full-blown bear market for the dollar." Julian Jessop, chief European economist at Standard Chartered Bank. Monday, July 15, 2002 "The dollar is under pressure from everything from economic problems to asset reallocation away from the U.S. and corporate accounting problems. It's difficult to see any positive factor for the dollar at the moment. The root of the problem is the U.S. current account deficit. If the U.S. doesn't have to attract an enormous amount of foreign capital, people wouldn't have to wor...

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