Bought 4 MFC 10OCT Puts 17.00 @ $1.48, Mark $16.38

The market is under pressure as illustrated by EUR/USD weakness (Figure 1). I’m not sure which way it will go just yet. But I am placing my bet on the bears as oil (DBO) has already cracked.

I waited the whole week for a retracement to re-enter a short position. I thought the FOMC announcement today could produce some sort of short-term rally. But nothing materialized. This lack of a retracement rally after a 30 points drop in the S&P500 between Monday and Tuesday is good for the bears.

Furthermore, seeing that EUR/USD is testing resistance again, I am establishing an equity short with a financial company. In particular, Manulife Financial (MFC.TO) is my victim as it appears to be the weakest of them all (Figure 2).

EUR/USD hourly chart

I say that because despite the recent advance in the market, MFC.TO is still struggling around the year-low (Figure 2).

Manulife Financial (MFC.TO)

My mental stop is a close above $16.50. A hard stop is $1.00 on my options premium.

That equates to ($1.00 – $1.48) * 100 * 4 = -$192 – ($13.95 x 2) commission = $219.90 = 2.3% of account.

Related posts:

1. Bought 3 CM.TO 10Oct Puts @ 5.00, Mark $74.02
2. Bought 3 CM 10OCT Puts 74.00 @ 5.65, Mark 72.30
3. Bought 3 ABX 10OCT Puts 46.00 @ 4.00, Mark $44.67
4. Bought 4 MFC Jan 2010 Puts 14.00 @ 1.70, Mark $13.25
5. Sold 4 MFC 10OCT Puts 17.00 @ @1.43, Mark $16.27, Loss -0.5%