Investment Fund Series A Status

Total net asset US$87,147. Cash position US$86,943.

Fund Series B Status

Total net asset US$18,736. Cash position US$19,586.

Investment Fund Series A Update for end Fri 31-Oct-08

No trades today.
MS closed the day at $17.47.
Option positions unrealized PnL is +$6,401.
As a seller, time decay and volatility decay advantage are on our side.

Remarks :-
Dow gone up by 144 points and closed at 9325 against what I have expected.
Nov and Dec typically are positive months for US shares. So, Dow may trends upward if there is no major negative news. However, with the huge market volatility, it will gyrate and can go either direction.

Investment Fund Series A Update for end Thu 30-Oct-08

No trades today.
MS closed the day at $16.09. Implied volatility at 148%.
Option positions unrealized PnL is +$4,991.
Thinking of liquidating all and lock-in the above profit immediately instead of waiting till expiry Friday 21-Nov to keep the full $8,340 (probability around 75%). As a seller, time and volatility decay advantage is on our side. Overall probability of losing money on this ladder of four option steps is less than 5%. Will be travelling on business trip from 10-Nov to 16-Nov and will be left with one week before expiry. Concern that no time to monitor and to place "guarding" auto trades. Likely will liquidate early and close out some or all positions soon.

Total target profit is $8,340 by option expiry Fri 21-Nov
To win full $8,340 by then, MS must stay at the fol. levels or above :-
10x MS-Nov-12.50-PUT ==> 12.50 - 1.65 = $11.85 (target profit $1,650)
10x MS-Nov-10.00-PUT ==> 10.00 - 1.10 = $8.90 (target profit $1,100)
30x MS-Nov-7.50-PUT ==> 7.50 - 0.81 = $6.69 (target profit $2,430)
20x MS-Nov-5.00-PUT ==> 5.00 - 1.58 = $3.42 (target profit $3,160)

Remarks :-
Dow gone up at market open. Market generally on up trend today against what I thought which is down. The Fed cut interest yesterday from 1.5% to 1.0% did improve the market sentiment.

Investment Fund Series A Update for end Wed 29-Oct-08

No trades today.
MS closed the day at $14.76.
Option positions in profit at +$4,105 unrealized PnL. Will continue to hold and may liquidate some prior to expiry Fri 21-Oct.

Remarks :-
Fed cut 50 interest from 1.5% to 1.0%.... one of the lowest that I can remember.
Thu and Fri likely to see more sell down as funds trying to close their books for 2008 and write off their loses. Funds will start buying again next week in early Nov at low prices to have a good start for the year 2009.
Notice that the further away out-of-money price changed that largest when Volatility dropped.
e.g. MS Implied Volatility dropped from yesterday 219% to today 154%. The option MS-Nov-5.0-PUT dropped the largest in price among the other stike-price options from $0.30 down to $0.20, a 33.33% dropped (eventhough the MS closing price dropped from end-yesteday $15.10 to end-today $14.76).

Investment Fund Series A Update for end Tue 28-Oct-08

STO (SELL To OPEN) some trades today to capitalize on the high Implied Volatility level of 220%.
SELL to Open another 10x on MS-Nov-7.5-PUT at $1.25.
SELL to Open another 10x on MS-Nov-5.0-PUT at $0.55.

Fairly volatile market today. Market open with Dow going higher. But MS and C both going down but reversed back up above opening price at closing.
At 10:27am EST, MS dropped all the way to $10.86 with fairly high volume by institutional sellers. Volatility increased to 220%. No major significant negative news on MS. Still believe that the price will stabilize or rise above $12.50 or $15.00 over the next 21 days.

At 10:49am EST total positions Unrealized PnL went down to -$3,635 (not includig profit of +$2,036 on MS-PUT-Nov-5.00).
Setup far away auto stop-losses guard and went to bed.




Stop loss did not get trigger. At market close 4:00pm EST, MS gone back up to $15.20. Unrealized PnL went back to positive at +$915 (not including profit of +$2,536 on MS-PUT-Nov-5.00).
Target profit by expiry 21-Nov is 1650+1100+2450+3150 = $8,350.

Investment Fund Series A Update for end Mon 27-Oct-08

No trades today.
Deepavali holiday yesterday. US market was very volatile and no clear directions. Did not trade.
Existing positions Unrealized P&L (paper gain/loss) reversed from +$420 to -$678. Auto stop-loss did not get trigger last night.
Expecting the unrealized P&L to potentially increase to more -ve before turning around. To continue to monitor and put in place auto stop-loss.

MS ended at $13.73
To win by option expiry Fri 21-Nov, MS must stay at the fol. levels or above :-
10x MS-PUT-Nov-12.50 ==> 12.50 - 1.65 = 11.85 (target profit $1,650)
10x MS-PUT-Nov-10.00 ==> 10.00 - 1.10 = 8.90 (target profit $1,100)
20x MS-PUT-Nov-7.50 ==> 7.50 - 0.60 = 6.90 (target profit $1,200)

(10x MS-PUT-Nov-5.00 ==> 5.00 - 2.60 = 2.40. This position was Open up during Oct Option month. Target profit $2,600).

Probability of wining by 21-Nov is still there with Time Decay and potential drop in Volatility on our side from now till that date.

Remarks :
Hedge fund managers selling to cover margin calls.
Expecting other fund managers to continue to sell their positions and lock in their losses from now till end of Oct (heard they close their 2008 books on end Oct, to be verified). The fund managers will start buying in again in early Nov to prepare for next year (2009), buying low low and have a good start for their 2009 performance.

w.rgds,
Go888Go