The 1st up-wave Reversal happened last nite!

After the 5 major US banks reported Q1 'good' profits (using the new FSAB accounting rule of each bank determine their own toxic asset value), the cold facts of other non-financial companies reporting low or negative profits proves to be a cold shower on those who are hot on share market.

In view of the turning point that I anticipated, yesterday morning I decided to adopt the "Black Swan" book approach of using option to take advantage of the market. By buying a Put option, I will profit from the STI and HSI downward move, when it falls bellow the strike level. If the index does not fall below the strike level, I will simply lose the premium of 25.5 cents per lot for STI, and 18.5 cents for HSI.

Order No 13575 : 10,000 shares of STI 1800 DBePW090701 Action : Buy
Order Status : 10,000 shares of STI 1800 DBePW090701 at $0.255 Status : Done 20/04/09 11:20:51 AM

Order No 15619 : 10,000 shares of HSI14000BNPePW090629 Action : Buy
Order Status : 10,000 shares of HSI14000BNPePW090629 at $0.185 Status : Done 20/04/09 09:45:07 AM

The market has not open yet, though last night, with DowJones has dropped about 3%. There are more bad news coming on stream. Besides poor corporate results, the unemployment will raise further and retail sales will remain weak for the next few months.

I will update my trading in deltatrading.blogspot.com for those who are interested to follow my trades.

Art

The Art of Investment.....Delta or the Intrinsic value is the key

Wealth is relative as assets value varies with the changing market valuation. As such, to stand still is an decision as much as to move forward or backward. As values constantly change, so the need to manage prudently hard-earned wealth is as important as earning them.

Art