Fusion Investor Chatbox

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Thursday, December 27, 2007

SINOPEC-C1 Case Study

Hello everyone and good evening!

Firstly, thanks for the many enquiries received. I'm doing well, and have been trading privately, and occasionally browing the cbox and find interesting comments made there. I should add that "tradester" is not me :-)

As I have a few minutes this evening and the cbox seems quiet, I thought I write something a bit different tonight to stimulate discussions there. I would like to share with you my recent actual trading experience with SINOPEC-C1. (Yes, I stopped chatting, but I haven't exactly stopped trading :-) ) I don't think it's a perfect trading experience - I made my share of trading mistakes there. But at the same time, I did a few things right, which contributes to the result. You may find it interesting and instructive to analyze each trade below and perhaps the traders amongst you might find it interesting to discuss what I did right and what I did wrong and can better improve.

For background, SINOPEC-C1 is not my largest trade, nor my largest profit. On both counts, it is smallish / moderately small. Hence I don't mind sharing it here.

Note the following:

1. At the start of Dec, I have zero position on SINOPEC-C1. I have traded SINOPEC-C1 before several times in and out completely. My first entry in Dec is on the 18th.

2. There are 11 transactions in total since Dec 18 to Dec 27.

3. On Dec 26, I exercised 100,000 SINOPEC-C1 shares. Dec 27 closing price in HK is HKD$12.16. Assuming an exchange rate of $2.37 (still not sure what this is exactly), the equivalent price is around 26.67 sen. The order to exercise was given on Dec 26, and you will note some arbitraging trades there.

4. You may notice a few very small trades and a couple of larger trades. You may wonder why the different sizes. (Hint: I personally find that when I execute trades however small, I somehow have a heightened sense for where the market might go, rightly or wrongly - do you have the same feeling?).

5. You may note that SINOPEC-C1 is traditionally regarded as a risky call warrant due to the short expiry date. Are all short-expiry CW risky? What defines risk?

6. Please don't regard this article as a recommendation to buy SINOPEC-C1. This evening, SINOPEC-C1 closed at 27 sen. My unrealized gain is around $18+k, but I could easily dispose this tomorrow morning at 9 AM, or add more position. To be honest, I don't yet know at the time of writing.

Hope to see an interesting and productive discussion tomorrow. I hope there will be a few traders there. Unfortunately for me, I am most likely to be occupied tomorrow, but you might find reviewing the 11 trades above to be insightful. Anyway, I haven't tried this before, so, let's see if you find this useful or not. If not, we'll try something else.

Good night, happy trading, and have a Happy New Year!

Best wishes,

PS. Do feel free to leave a message here and I'll try to respond to that next week if it's productive.

1 comment:

rask3 said...


Congrats. You seem to have pretty awesome trading prowess, for what it is worth. I know, it is not how often you are right or wrong, rather it is the magnitude of the money you make when you are right and the amounts you lose when you are wrong that matters.

Still I'm curious. How often are you successful in your trades, in numerical or frequency terms, not in magnitude? You don't have to answer if you don't want to.