yonglong's Xanga

I HAVE MOVED

Tue, 10 Apr 2007 04:03:55 GMT

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Trading Diary
http://yonglonglai.com/category/shares/trading-diary/

March Option Expiry

Thu, 29 Mar 2007 15:00:58 GMT

My three position expired worthless today! YAY

After brokerage profit of $3,049.4 from risking $15,000 (before tax). Thats 20.3% returns in approximately 30days, thats an amazing ~247% returns per annum annualised!!!

Hopefully this will happen again for the next month! I will keep you guys informed on my new positions that I open up for April. Currently I have OXR contracts opened for April, which should go well (bare in mind there is a 5c dividend for OXR in April)

Have a good night!

OXR - roll out

Wed, 28 Mar 2007 10:39:25 GMT

Just to explain to people what rolling out means:

Rolling out means, closing my current contracts at a loss and reopening an equivalent contract for the next month to pay for the loss:

Initial Trade:
Sell 20 OXR X=$3.00 MAR Contract @ 9.5c       +$1,900
Buy 20 OXR X=$2.75 MAR Contract @ 2.5c       -$500
                                                                 +$1,400 (Net Credit)

Roll Out:
Buy 20 OXR X=$3.00 MAR Contract @ 13.5c      -$2,700
Sell 20 OXR X=$2.75MARContract @ 0c            +$0
Sell 20 OXR X=$3.00 APR Contract @ 22.5c       +$4,500
Buy 20 OXR X=$2.75 APR Contract @ 8c            -$1,600
                                                                +$200 (Net Credit)

After rolling out my position, I will end up with:
Sold 20 OXR X=$3.00 APR Contract
Bought 20 OXR X=$2.75 APR Contract
(At the end of April, if OXR stays above $3.00, I will profit $1,600.
Bare in mind this is over 2 month period, usually we expect to get
this return over 1 month)

Brokerage has not been taken into consideration, Assuming everything goes well for April. There will be $579.5 worth of brokerage on the $1,600 income.

What I have effectively done is delayed my profit for the next month because I was unable to take any profit this month. This is one of the 'coolest' strategy I have ever seen in my life, I never knew you could make money from this until about 6 months ago.

As for the rest of my positions, I am expecting all of them to expire worthless. This means I will have generated $3,000 worth of FREE money by risking $15,000 (borrowed money) in approximately 30 days (after brokerage). The best thing is, I didn't even try very hard. Must have spent approximately 1hr maximum during the month finding those trades and researching. I spend more time writing in this blog then I do finding and monitoring my trades!!!

I will keep you guys up to date tomorrow, when the March contracts expire!

Weekly Update

Mon, 26 Mar 2007 14:50:11 GMT

It has been a good recovery in the market over the past 3 weeks. The All Ords closed at 5970.50, it has nearly recovered back to the 6000 mark. Over the past 3-4weeks there was plently of opportunity to make a lot of money!

I have been busy building my business over the past few weeks to monitor my position and open any new ones. Currently all but one of my position are doing very well.

FGL   6.5/6, currently trading at 6.68 (position is safe - 24% returns over 34 days)
WPL 36/35.5, currently trading at 38.23 (position is safe - 20% returns over 34 days)
QBE   30.5/30, currently trading at 32.45 (position is safe - 30% returns over 20 days)
OXR   3/2.75, currently trading at 2.81 (monitoring this position - 28% returns over 30 days)

US market is falling as we speak, down ~0.6%, i'm expecting the market to drop tomorrow morning, however it should not affect any of my position, except may OXR. I am prepared to roll the OXR position out to April, hopefully at a lower strike.

3 more days till options expiry! exiciting times!

ZFX - Recommendation

Sun, 18 Mar 2007 03:20:51 GMT

Title: Zinifex Limited (ZFX)
Trade Date: Thursday 15th March 2007
Last Traded Price: 16.11
Description:
Zinifex has held up extremely well considering the recent market sell off, we favor Zinifex at these levels. Good volatility in the stock means that even mid way through the month we can still sell puts reasonably far from the money and receive good premiums. The stock pays a 70 cent dividend the day after expiry so we expect the market to be bided up for Zinifex as investors will be attracted to the dividend. Bull Put Spread - MAR 15.50 PUTS @ 23 + MAR 15.00 PUTS @ 12.5 Expiry = 29/3/07 SPC = 1000 Max Profit = 10.5 cents Max Risk = 39.5 cents ROR = 26.6% Breakeven = $15.395 (Again, I did not personally open this position as I have enough exposure in the market for this cycle) Remember to play by the rules Mastery of Stock Market Intelligence

ASX - Recommendation

Sun, 18 Mar 2007 03:01:30 GMT

Title: ASX Limited (ASX)
Trade Date: Wednesday 14th March 2007
Last Traded Price: $41.97
Description:
ASX has put in a fantastic run since it's break of resistance at 39.50, climbing rapidly up to 45.22. With the recent drop in the overall market ASX has retraced back to find support at 41.00, just above its 50% Fibonacci retracement level of 40.50. ASX is a strong trending stock, it may come back to touch it's 50-day MA, but we feel confident it will finish above 40.79 by March expiry. Bull Put Spread - MAR 40.79 PUTS @ 62 + MAR 40.31 PUTS @ 48 Expiry = 29/3/07 SPC = 1017 Max Profit = 14 cents Max Risk = 34 cents ROR = 41.2% Breakeven = 40.65 (personally, i did not enter this position as I have enough exposure in the market for the time being)

ASX - Recommendation

Sun, 18 Mar 2007 03:01:29 GMT

Title: ASX Limited (ASX)
Trade Date: Wednesday 14th March 2007
Last Traded Price: $41.97
Description:
ASX has put in a fantastic run since it's break of resistance at 39.50, climbing rapidly up to 45.22. With the recent drop in the overall market ASX has retraced back to find support at 41.00, just above its 50% Fibonacci retracement level of 40.50. ASX is a strong trending stock, it may come back to touch it's 50-day MA, but we feel confident it will finish above 40.79 by March expiry. Bull Put Spread - MAR 40.79 PUTS @ 62 + MAR 40.31 PUTS @ 48 Expiry = 29/3/07 SPC = 1017 Max Profit = 14 cents Max Risk = 34 cents ROR = 41.2% Breakeven = 40.65 (personally, i did not enter this position as I have enough exposure in the market for the time being)

Weekly Update

Sun, 18 Mar 2007 02:58:06 GMT

The Australia market has been sideway over the past 5 trading days (1week), The US subprime mortgage caused a relatively big correction during the week causing the market to go 'sideway'. Looking at our open positions (which are neutral/bulling) we are looking 'on track' with 9 trading days left (< 2weeks)

Current opened positions:
FGL   6.5/6      currently trading at 6.69 (position is safe)
OXR 3/2.75    currently trading at 2.73 (monitoring this position, however still safe due to time)
QBE 30.5/30   currently trading at 30.95 (position is safe)
WPL 36/35.5  currently trading at 36.10 (position is safe)

Remember, "To know and not to do, is not yet to know"
Learn all about this

Weekly Overview

Sun, 11 Mar 2007 12:30:20 GMT

Hi All,

The Australian market has had a nice recovery this week, it has managed to climb back up to a decent level. There is 14 trading days left for the March contracts, at the rate the market is going, it seems like there will be plenty of time for all the position to recover to a decent level. (hopefully, higher than the sold positions, so the contracts expire worthless - ie. nobody makes a claim on the insurance policy I sold)

Currently I have 4 positions opened.

FGL, 6.50/6.00, currently trading @ 6.39 (this position is 11c in the money - currently around breakeven, but with 14 days to go its looking good)
WPL, 36.00/35.50, currently trading @ 35.79 (this position is safe)
OXR, 3.00/2.75, currently trading @ 2.68 (32c in the money - potential maximum loss, but with 14 days to go its looking like it should recover)
QBE, 30.50/30.00, currently trading @ 30.68 (this position is safe)

Obviously, hoping for the market to be above the sold position at the expiry date (14 trading day from now)

Happy trading this week!

QBE

Sun, 11 Mar 2007 12:13:32 GMT

Title: QBE Insurance Group
Trade Date: Thursday 8th March 2007
Last Traded Price: $30.97
Description:
QBE has significantly out performed the market in recent times. With massive full year results, QBE is actively looking for acquisitions both domestically and abroad. Like the rest of the market, QBE declined in value with the recent market correction but has held its level nicely over the last few trading sessions.There is strong support for the stock above $30.50 which also makes selling the $30.50 march puts an attractive trade. Bull Put Spread - MAR 30.50 PUTS @ 46 + MAR 30.00 PUTS @ 34 Expiry = 29/3/07 SPC = 1000 Max Profit = 12 cents Max Risk = 38 cents ROR = 31.5% Breakeven = $30.38 Historically, QBE has been a very strong stock to have in the portfolio. Since the recent market correction, QBE is definitely looking very attractive. I managed to enter this position with 15cent credit, ie slighty better then the example above.