Covered 4 MFC 11JAN Puts 14.00.MX @ 0.45, Mark 14.80, Loss -2.3%

The S&P500 is filling its gap from that big up move on November 4. EUR/USD is bouncing off a long term support around 1.3600. Thus I’m covering my short in Manulife Financial (MFC.TO) before the weekend. This position turned out horribly.

I’ve been waiting for MFC.TO to print 14.50, just above its 38.6% Fibonacci retracement level at 14.40 on the recent spike. But 14.80 doesn’t seem to budge even today with all that bearishness floating around. Intraday volume is also decreasing on every new test of this intraday support. So I’m throwing in the towel here.

Loss is ($0.45 – $0.93) * 4 * 100 = -$192 – $27.90 = -$219.90 = -2.3% of account.

Manulife Financial (MFC.TO)

Bought 4 MFC 11JAN Put 14.00 @ 0.93, Mark 13.97

It’s been a while, my old friend–Manulife Financial (MFC.TO). Now, die!

Stop is stock closing price above 14.30, today’s high. Risk is about ($14.30 – $13.97) * 4 * 100 = $132 + $27.90 = $159.90 = 1.6% of account. Note that calculation is not accounting for option theta (time decay).

Manulife Financial (MFC.TO)

Sold 4 MFC 11JAN Puts 14.00 @ 1.74, Mark 12.96, Loss 0.1%

S&P500 managed to bounce back from below 1130 support. It is confirmed by EUR/USD’s rise and treasury’s gap down (TLT) today. I’m not going to argue with the market. So I am ditching my short for Manulife Financial (MFC.TO) while it is still testing its 13.00 resistance at the open.

12.60 is the 50% Fibonacci retracement level for MFC. It made a textbook perfect bounce on it (Fig. 1). Also, it’s Friday today, so I’d rather not have the time decay eat more out of my premium by holding over the weekend.

Loss for this trade is ($1.74 – $1.70) * 100 * 4 = $16 – $27.90 = -$11.90 = -0.10%.

Now that I am out of my short position, watch the market tank without me on board.

Update: MFC and the market managed an impressive rally today. MFC closed at 13.15. I am glad that I followed my own strategy. I guess I do make good timing once in a blue moon.

Manulife Financial (MFC.TO)

Bought 4 MFC Jan 2010 Puts 14.00 @ 1.70, Mark $13.25

I am shorting again. This time on Manulife Financial (MFC.TO) with a January 2011 put at 14 strike price. MFC is trading at $13.25 at time of entry.

Recent series of prop desk closings isn’t going to bode well for the market, particularly for the banks as they need to recuperate those easy income. On top of it, the lack of push from the bulls this week as S&P test 1110 resistance doesn’t look promising either. Yet, this could very well be a bear trap.

In any case, I am taking a bearish bet via shorting MFC. Figure 1 shows a chart of MFC. It is depressed and it is struggling. Moreover, MFC keeps announcing billions of dollars worth of share offerings lately. I like it.

There is a distinct possibility of a bear raid if MFC can break this $13.50 resistance level. The gap above $15 is just staring at me.

Hard stop is at $1.00 premium. Worst case risk for this trade is thus ($1.70 – $1.00) * 4 * 100 = 280 + $27.90 commission = $307.90 = 3.2%. However, I’d be very cautious if MFC closes above $13.50.

Manulife Financial (MFC.TO)

Sold 4 MFC 10OCT Puts 17.00 @ @1.43, Mark $16.27, Loss -0.5%

Not much is happening in the market as it is trading in a tight range. This is not good for my options as the time delta will slowly eating away my premium. So I’ve decided to unload this position at a small loss just now as the market is testing support across the board.

The U.S. dollar index is testing $86 resistance. Oil is testing $78 support. S&P500 is testing the 1070 support zone.

Purchase price for these puts were $1.48 per contract last Wednesday. When Manulife Financial (MFC.TO) was trading at 16.38.

Loss is ($1.48 – $1.43) * 100 * 4 = $20 – $13.95 * 2 commission = $47.90 = 0.5% of account.

As you can see, the commission is horrible on my RRSP trading account at Questrade. I will wind down trading options from now on and move back to trading forex in the summer. My live account at Dukascopy is ready…

Update: The market finally broke support the day after this exit. This was not a good exit as I lost patience. MFC is testing $16 support on June 29th opening hour and I don’t expect it to hold. This could turn out to be a winner if I had held.

Manulife Financial (MFC.TO)