Tuesday, February 25, 2014

Facebook Trade

The market responded with a sharp turnaround on the day of the announcement, initially seeing a price hit around 66 (where I entered) and then rebounding to close at 70+.  I was a little shocked to see such a turnaround; given how I thought the market was indicating a much more averse reaction to the news.

The market is always about head fakes and trapping your capital at the worst possible moments, on the overarching theme of tech bubble 2.0, and markets in overheated, resistence level territory, the timing of the top is going to get more costly and harder than ever.

Wondering whether or not I have a decent record shorting or not, I decided to go quickly to my records and my new R skills allow me to quickly compile all my short trades since I started 5000 trades.  Alas, what I had feared, I am down about 7.8% total on my closed short positions.

Going back to the facebook trade, there was another announcement about the Whatsapp service bringing in a voice calling service by Q2 this year and we saw another spike past the 70 level and I closed my short position after hours.  

Being early on a trade is still wrong, but I'll be lurking around FB to see if it makes any parabolic move higher, which I will attempt to position a short again, maybe with long dated options.