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Wednesday, 13 February 2013


So much for range trading gilts. Got hit on the GTC bid at 115.95 earlier today, only for them to crash out through the bottom of the range. Still have 5/6 of the position though, next bid is 114.85 for another 5. Hopefully will get hit late in today's session, and be able to sell them back out on a bounce tomorrow as everyone reconsiders. I still want to be short gilts for another 15-20bps ideally.

Other trades today :

1. Got hit on a bid for 5 ush3 at 142-16, taking profit on 1/3 of the bond futures I'm short. Now short 10 ush3. Working nothing at the moment, but should probably cover some more another point lower.

2. Added to Sirius (SXX.L). It traded down 13% this morning on a story about delaying the detailed feasibility study for their potash mine and the resignation of one of the senior staff. Looking through the details, it seems to be a storm in a teacup, so added another 25,000 at 25.25. Total position now 250,000.

3. GBP is getting whacked because of King's comments (ostensibly). I think it's more likely that what's happening is that the flight to safety positions from the EUR are now stopping each other out, aided and abetted by a decent short base from fast money. The data doesn't seem so bleak : rising house prices at last, and strong private car sales. On top of which, there's been a dramatic easing in financial conditions in the UK since November, which won't be visisble in the data yet, but should start to appear in 4-6 weeks time. With Cameron's leadership how can we go wrong ? Anyway, added another clip of gbpjpy :

bought 0.25m GBPJPY at 145.35

Next stop 144.07 for 0.5m, GTC

4. After cleaning out the ESH3 15Feb covered calls I bought 20 ESH3 outright. They've rallied about 8 points (a nice start), so take a little profit and add some time decay by selling covered calls against these too :

sell 20 ESH3 15Mar 1540 calls at 9.00

That's a 33 delta. If we get there by expiry, then the Mar28 1520/1570 call spread (on ESM3, currently 1514) will be making a lot of money, so no regrets involved in being exercised if it happens. And if it doesn't then I have an extra 9 point cushion on the downside. 

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