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Trading from the Wrong Side

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Sometimes you just end up on the losing end.

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Editor's Note: The following was posted in real time on our premium Buzz & Banter (click for a free trial). It's being shared here for the benefit of the Minyanville community.

SO, how you doin'? On my side, the single longest day in recent memory (that began last Monday) continues to continue as I shovel coal into the furnace. As old school Minyans can attest, honesty, trust and respect are central tenets in the 'Ville and I offer the following fare with that in mind.

I recently offered that trading, as with most things in life, is cyclical and we've gotta take the good with the bad. I've had some stellar stretches over the course of my career as well as periods I would just as soon forget. Anyone who tells you they haven't seen both sides of the trading sword is either A) fibbing or B) someone you don't wanna listen to.

As Henry Hill famously said, "Everybody takes a beating sometimes."

I'm not sure I would qualify this recent stretch as a "beating" (my positions were sized correctly and I traded around my risk) but it's all relative. My grandfather taught me all we have is our name and our word and I take both quite seriously, particularly amongst the Minyanship. For some strange reason, I take a "wrong read" on the 'Ville more personally than I do a red bottom line.

So, with that as a context, I'll offer a humble mea culpa for the Foreign Feel of late. If it's any consolation, I'm hell bent on making it up in spades to ye faithful and promise to do just that. Given my current schedule, however--I've got an out-of-office meeting at 2:30 and I'll be traveling tomorrow and Friday--discipline dictated paring risk, which I've done this morning as previously communicated.

While I've flattened a fair share of risk, I've left a slew of out-of-the-money puts on my book (Research in Motion (RIMM) $60-line puts are among them, for when that gap fills, it should fill fast). I generally don't like to leave blind bets on while traveling but my risk is defined (the collective premium) and should they expire worthless, I'll still have enough money to feed Pheobe and maybe, just maybe, afford a burger at PJ Clarke's (Yum!).

As for the here and now, all I can say is that the entire world seems ready to react to an upside break, so the probability spectrum includes 1) an immediate Debbie Downer, 2) a Pop & Drop (after technical affirmation arrives) or 3) up, up and away in a self-fulfilling prophecy to S&P 1050 or higher. I'm somewhere between the first two outcomes but as we know all too well, we've gotta stay humble in this business or the markets will do it for you.

Lemme jump to chew through the slew of to-do's in front of major Minyan melds. Please know that all of these "off the desk" meetings share a singular mission: to make the 'Ville a community you're proud to be a part of. Thanks for understanding and know that we won't stop until we change the world, one Minyan at a time.

May peace be with you.

R.P.

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