Saturday, July 3, 2010

Bookkeeping: Taking Off Short Index Exposure

Yesterday just under S&P 1040 I added what I consider modest short exposure. I shorted about a 4.5% exposure in TNA ETF (3x Bullish Small Cap) ... in the real world I'd go long TZA for simplicity but to keep my record keeping easier between long v short, I do 'short TNA' for model fund purposes. I sold about a third of that exposure this morning for a 4%ish gain and I am going to sell the rest here for about a 12% gain.

Yesterday, I bought 2 series of puts, 2.5% allocation into each: SPY 103 puts and SPY 102 puts. Total 5% allocation. Both are up around 60% so I am going to sell them both and take my quick and dirty gains. They did an excellent job hedging off any long losses and for 3-4 hours of work, I'll take 60% anytime. I'm posting a screen shot only so when someone asked "how did you make XX% with 80% cash!?" I can refer them to this post.

Could there by more downside? Certainly. I just believe this rubber band to be very stretched at this point and risk is now as large for bears as bulls. When I feel some comfort a real bounce may be coming, I'll do the exact opposite of these 2 trades.

Any upside target for now would be to S&P 1040.

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