Friday, January 18, 2013

Low Volatility Trading

Towards end of last quarter I had failed shorting attempts at Galaxy, Lululemon, Amazon, with most doing minimal damage.

I get a lot of my macro trades from the blogging crowd; last year we had so much to choose from, where we could attain returns, some market risk premium, some uncorrelated bets, some of my bets that worked.
- Euro options, and anything related to euro was a good bet last year
- Goldman sachs as a derivative off the euro fears
- 50 year drought in the US allowing for a large move in soft commodities, which I captured through QAG
- Going long the AUD
- Going short the YEN
- Natural Gas: (although I didn't profit from my UNG positions, due to the volatility and crazy contango taking me out of my position)

So far, no real themes are developing, so I'd been cautious for the past few weeks.

Today we saw good China data, gdp and retail beating expectations, and US housing figures were at 4 year highs, and the sentiment in the markets have been cautious.  All of these factors are forcing me to increasing my risk exposure, despite my bias to want to stay less invested.  I've been trying to catch a lower bid on some stocks, but have been unsuccessful so I've established some positions in Silver, Coffee and Oil. I'll be adding some GLD, GDX tonight.