While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points.
Read more
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
Global Market Comments
June 25, 2014
Fiat Lux
Featured Trade:
(JULY 7 ROME, ITALY STRATEGY LUNCHEON)
(WHERE THE ECONOMIST BIG MAC INDEX FINDS CURRENCY VALUE),
(FXF), (FXE), (FXA), (FXE), (CYB)
(THE FALLING MARKET FOR KIDS),
(HOLLYWOOD CASHES IN ON WALL STREET TROUBLES)
CurrencyShares Swiss Franc Trust (FXF)
CurrencyShares Euro Trust (FXE)
CurrencyShares Australian Dollar Trust (FXA)
CurrencyShares Euro Trust (FXE)
WisdomTree Chinese Yuan Strategy ETF (CYB)
My former employer, The Economist, once the ever tolerant editor of my flabby, disjointed, and juvenile prose (Thanks Peter and Marjorie), has released its ?Big Mac? index of international currency valuations.
Although initially launched as a joke three decades ago, I have followed it religiously and found it an amazingly accurate predictor of future economic success. The index counts the cost of McDonald?s (MCD) premium sandwich around the world, ranging from $7.20 in Norway to $1.78 in Argentina, and comes up with a measure of currency under and over valuation.
What are its conclusions today? The Swiss franc (FXF), the Brazilian real, and the Euro (FXE) are overvalued, while the Hong Kong dollar, the Chinese Yuan (CYB), and the Thai Baht are cheap. I couldn?t agree more with many of these conclusions. It?s as if the august weekly publication was tapping The Diary of the Mad Hedge Fund Trader for ideas. I am no longer the frequent consumer of Big Macs that I once was, as my metabolism has slowed to such an extent that in eating one, you might as well tape it to my ass. Better to use it as an economic forecasting tool, than a speedy lunch.
The Big Mac in Yen is Definitely Not a BuyWhile the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
Global Market Comments
June 24, 2014
Fiat Lux
Featured Trade:
(LAST CHANCE TO ATTEND THE JUNE 26 ISTANBUL, TURKEY STRATEGY LUNCHEON),
(THE BEST FINANCIAL BOOK EVER),
(A DAY WITH TOM FRIEDMAN OF THE NEW YORK TIMES)
As a potentially profitable opportunity presents itself, John will send you an alert with specific trade information as to what should be bought, when to buy it, and at what price. This is your chance to ?look over? John Thomas? shoulder as he gives you unparalleled insight on major world financial trends BEFORE they happen.
Further Update to: Trade Alert -(SPY)
Buy the S&P 500 (SPY) July, 2014 $199-$202 bear put spread at $2.64 or best
Opening Trade
6-23-2014
expiration date: July 18, 2014
Portfolio weighting: 10%
Number of Contracts = 38 contracts
I?m getting a lot of feedback from my many Trade Alert followers that many brokers have refused to make markets in the July $202 puts for the (SPY). If they are, they are placing size limits as low as 200 contracts.
To see these cease to trading so close to the money with three plus weeks to expiration is unheard of. But then, what else is new.
I know OptionMONSTER is still trading the $202 strike, because that is where I got my price.
It is yet another sign that brokers are afraid that they won?t be able to lay off the risk in this horrendously low volume and illiquid summer market, and therefore lose money. We are trying to sell short volatility to them, and they don?t want to own it, even though we are at historic lows.
So get whatever you can get done with the (SPY) on the short side at similar strikes. Or just walk away from the trade, as they are begging you to do.
You can always get some downside production in other form by taking positions in the 1X (SH) S&P 500 bear ETF, or the bear 2X (SDS).
It is all another reason to take a long vacation.
Time to put on some modest downside protections to hedge out 30% long exposure in equities.
The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep in-the-money spread trades can be enormous.
Don?t execute the legs individually or you will end up losing much of your profit.
Keep in mind that these are ballpark prices only. Spread pricing can be very volatile on expiration months farther out.
Here are the specific trades you need to execute this position:
Buy 38 X July, 2014 (SPY) $202 puts at???????$6.33
Sell short 38 X July, 2014 (SPY) $199 puts at?????$3.69
Net Cost:??????????????????.....$2.64
Potential Profit = (38 X 100 X $0.34) = $1,294, or 1.29% for the notional $100,000 portfolio.
Look Out Below!
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to six-month time frame, Mad Day Trader, provided by Jim Parker, will exploit money-making opportunities over a brief ten minute to three day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more