Plan for Friday

Not the Master(card) of My Domain

I got killed today on my Mastercard put position with their good news; that transactions are still flowing through the system and they’re still collecting their fees. My entire premise was mostly wrong because I didn’t understand their business well enough. I just thought that a downturn in consumer confidence and spending combined with their agents (the banks) going all usurious on their customers would cause transaction volumes to drop. And to a certain extent, it did slow the growth. The news was largely negative and their results were helped by major cuts in ad spending. Will morale improve now that the consumer beatings have stopped?

But at the end of the day, I flat out missed that one and my streak of being on the wrong side of financial trades continues. Props to @dmooney9 for calling this one right and staying long. I’m holding the puts a little longer simply because I can’t get my head around this irrationality and I think there’ll have to be some kind of pullback. Overall, down about 42% on that trade at the moment. The StockTwits sentiment is turning negative, so I have some company as I decide to recover from my horrible entry.

The only silver lining in this is that in the last two weeks I’ve started putting a lot more focus on maintaining appropriate position sizes, so while this is a loss, it’s not as bad as it might have been with the lack of discipline I had last fall.

And at least I wasn’t the last commenter in this thread last August, commenting on why Visa was such a good safe stock to swing trade as it sat at $72 (it closed at $53.74 today):

If, all you had done is buy and sell on every 5$ price movement on V since day one- you could have easily had 50 solid (and easy trades) under your belt. Is anyone naive enough to think the floor is going to fall out on V- and suddenly the shares will be trading in the 50s??

Backhanding PALM

Today I also finally picked up some PALM May $5 puts at my desired price. The downside is that these aren’t that liquid and I’m going against the chart. The upside is that PALM sucks and I expect this one to work out; I got in near the high of day. I intend to give this one no more than 10-15 days due to the May expiration.

NDAQ Puts on the Radar

Tomorrow, my eye is on Nasdaq (NDAQ). It shot past $23 today, but the puts order didn’t fill. If this rally continues tomorrow, I expect to get in when the stock hits 24.50 or so. Like Mr Creosote’s mint, this one feels wafer thin and seems to lead the way down when things fall apart. Better? Better get a bucket—it’s going to throw up.

I don’t see any longs that intrigue me at the moment. The downside of being negative for 6 months is that your favorites have already rallied quite a bit and it feels late to get in. I’m very short in my trading account, which is keeping about net neutral overall with my long term hold account. I sold a little INTC April $15 premium yesterday when it popped. But I need to get a little more in balance.