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
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