Archive for June, 2013

Comment by gbase

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  1. gbase
    June 21st, 2011 at 3:04 pm
    Income Trader -
    Thanks so much for this discussion!  I’d like help/advice with the following trade - which will hopefully be helpful to the rest of the group.   
    When I placed the July trade – I moved my strikes down 10pts.  As you may remember, the RUT dropped ~10pts that morning to 778.22 and when I reviewed the deltas it looked like moving the strikes down better fit your parameters.   Here is what I have:
    -5 RUT JUL11 690P  2.95 delta was .08
    +5 RUT JUL11 680P 2.30
    -5 RUT JUL11 845C  1.45 delta was .08
    +5 RUT JUL11 855C  .90
    Net Premium: $1.20
     
    I have the following questions:
    1) With RUT at ~805 - and the short 845C with a delta of .15 -- should I be buying insurance?  
    If so, what  and how many do you recommend?  (Please note – I only have qty 5)
    2) Should I have bought insurance sooner?
    3) Do you ever use TZA/TNA for insurance?
    4) Would you recommend closing the Put spread for .20 or better?  It is there now…
    4) Was moving the stikes down from your recommendations an obvious error?  By that I mean – in hindsight it seems like a mistake, but should I have seen something then that would have prevented me from moving down? 
     
    Thanks in advance for your help – this is a great Topic!!
     







Comment by IncomeTrader

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  1. IncomeTrader
    June 25th, 2011 at 11:33 am

     ocelli7-

     

    The trade was sent out as an alert to Income trader alert to subscribers. It was also posted in the comment section of the June trade cycle and will be posted by the end of the weekend on a the new page for the July Trade cycle. 







Comment by jomptien

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  1. jomptien
    June 25th, 2011 at 9:51 am
    I think he mentioned to make the dajustment when it is 10 points from your price – ex. 700 to 710 and 855 to 845 .







Comment by l4real

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  1. l4real
    June 16th, 2011 at 10:21 am
     Kojo,
    Is this the official alert?  You are suggesting that we roll down the Put side and roll down the call side as well?







Comment by l4real

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  1. l4real
    June 16th, 2011 at 11:32 am
     Good explanation of the Trade Management Income Trader! Good point dforster 2!







Comment by diamond

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  1. diamond
    June 21st, 2011 at 2:33 pm
    ocelli7 - July Trade.







China Manufacturing Conditions Deteriorate, New Export Orders Fall at Fastest Rate Since March 2009

Courtesy of Mish.

In what should be no surprise to Mish readers, the HSBC China Manufacturing PMI™ shows Operating conditions deteriorate at quickest pace since last September, and new export orders plunge.

Key points

Output contracts for first time since last October
New export orders fall at the joint-fastest rate since March 2009
Job shedding intensified

Manufacturing PMI

After adjusting for seasonal factors, the HSBC Purchasing Managers’ Index™ (PMI™) – a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy – posted at 48.2 in June, down from 49.2 in May, signalling a modest deterioration of business conditions. Operating conditions have now worsened for two successive months.

Chinese manufacturers signalled a first reduction of output for eight months in June. The rate of contraction was modest, and generally attributed to weaker client demand, as total new orders declined for the second month in a row. New business from abroad also fell in June, with the rate of contraction the fastest since last September, and the joint-sharpest in over four years. Anecdotal evidence suggested that reduced client demand, particularly from Europe and the US, led to fewer new export orders.

Comment

Commenting on the China Manufacturing PMI™ survey, Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said: “Falling orders and rising inventories added pressure to Chinese manufacturers in June. And the recent cash crunch in the interbank market is likely to slow expansion of off-balance sheet lending, further exacerbating funding conditions for SMEs. As Beijing refrains from using stimulus, the ongoing growth slowdown is likely to continue in the coming months.”

I frequently disagree with Markit economic comments but these comments from Hongbin Qu are spot on.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com 



Continue Here





Comment by IncomeTrader

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  1. IncomeTrader
    June 25th, 2011 at 11:30 am

     henryedelman -

    We are not gamblers, we are strategist and risk managers. Notwithstanding selling RUT naked requires massive amounts of capital. Look at the other side of your argument, what if there is a violent move to the up side, what happens to the naked short position. We have been around long enough to realize that anything can happen in this type of business and not to take risk management for granted.







Comment by IncomeTrader

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  1. IncomeTrader
    June 16th, 2011 at 12:21 pm

     i4real -

    This is just an article and not an alert. This is to enable subscribers understand how the adjustment process works.







Comment by henryedelman

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  1. henryedelman
    June 20th, 2011 at 6:42 am
    I can understand using a put spread to protect against a sudden and violent downside move but with the initial deltas so low, what is the disadvantage to selling a naked call instead of a call spread?







 
 
 

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