Showing posts from April, 2020

It's mad rush for gold again

Source: Saxo After the first mad rush for gold in March, the price did a pull-back and shot up again on 14th April. Circled points are the support levels that were good entry points. It takes some guts and conviction to stay vested during pull-backs in an uptrend. Any price of a good investment opportunity can look expensive when retraced backward and look cheap when extrapolated forward . So we need to be visionary when investing. That's how I have been trying to invest in the past few weeks besides my usual trading. Best performer was MLT. SG stocks portfolio:  -8.4% -- Has COVID peaked?  Is this the start of another bullish trend for stocks (due to cheap money) or just a dead cat bounce (as covid lockdowns impact earnings moving forward)? Only time can tell. We are navigating murky water again. YTD P/L. Inconsistent. --- It really sucks to work when most people WFH and sucks even more to see people going out to shop with family (

Mitigating risk factors to trade loss

Risk factor 1: Fundamentals of a company - CEO change This is not exactly a black swan event as most likely employees and board of the company would have gotten wind before the news is officially out. However, to retail investors who don't or can't really scuttlebutt, it is sometimes hard to react in time. One fine example was the IBM CEO change which strongly enhanced sentiments and caused a major spike in share price this early Feb. I was forced to cut loss on my short position then. - Operating margin / revenue changes That's why market is very sensitive to earnings report. Just take a look at how the US stocks fluctuate when the season is in. You don't want to be longing or shorting one day before the earnings come out, unless you are an insider. - Debts to Assets ratio Sometimes a company may take on more debts than it can manage and that should send a warning sign. Debts could be used for business expansion, share buy-back (yikes

Option - a close call

Yesterday, I tried my hands at Option  - bought a VIX call option contract that expires in 1 week. Background: "An option premium is the current market price of an option contract. For stock options, the premium is quoted as a dollar amount per share. It depends on the price of the underlying asset and the amount of time left in the contract . Option price above was opened at $4.90, closed at $5.25." Facts about Saxo's option: - American style - Settlement: physical - Contract size: 100 - Commission per option $3+ My Lesson As you can see in the snapshot above, I have sized terribly wrongly.  I could have lost it big if US market failed to slide before the option expires (the slide came today, I am lucky or what?!). Yeah it's a really expensive hedge. So phew... 🤦 You have got the pun in my title. Oh well. Better stick with plain vanilla EQ and CFD. --- Gold slided. Investors are moving into cash again. Like what yo


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