Closed out the GLD position today for 1.32, realizing a loss of 0.54. Could have been much worse. I basically just got unlucky with this trade; it shot up 6.XX% literally the day after I opened the position. I did all I could to reduce losses, and decided against rolling the position out. After all, rolling out does in fact reduce overall risk, however, I'd rather take a loss of ~$150 right now than have a 70+% chance of losing $300 in 40 some days.
In my first 6 months of trading, I bought GLD the week of April 8, 2013. Gold proceeded to have a fantastic meltdown, dropping from 1500 per ounce to 1100 per ounce over the following weeks. I got rekt. I will never forget that trade, because it was probably my worst of all time. So, I have a bias against doing anything in GLD. I have been burned on this ETF several times over the past four years. But, you gotta sell vol where it's high, and unfortunately that brought me to GLD.
SPY is down today, but as of writing only by about -0.60%. If SPY can decline to 196 by next week I'll consider closing out this position. But, unlike GLD, I have a larger break even span on SPY, 193.16 and 198.84. Therefore, rolling out to a new expiration isn't out of the question, so long as I can get a good credit. This one has been a headache.
The FXE position is looking good, trading at 0.74, down from 0.95 where I sold it. The ECB meets in two days to determine monetary policy. It is widely expected that Draghi will come out announcing more stimulus, but of course nobody knows how much. I think it will be in line with whatever the market expects, i.e., it probably will be stimulus and in the amount expected, probably not more.
Thinking about getting short EWZ, the Brazilian stocks ETF, today. Problem is liquidity. It may not be there when I need it. The other problem is being "double short" the market. EWZ and SPY have been trading in tandem since the beginning of February. Not in lockstep, but they're both up and down on the same days typically. Both have rallied since the SPY bottomed. EWZ however gapped up big a couple days ago, and has very high IVP. It is also coming down quite rapidly, having been 93 two days ago and at the time of writing is sitting at 78.
Unfortunately I did not get long bonds, that is, TLT. TLT gapped up 2 points today, a rarity. I was contemplating getting long yesterday but was unsure, and now the opportunity has been lost. I think there's a good chance TLT rallies two more points to 135ish over the next few days before stopping.
Nothing else is coming under the radar in terms of high IVP, and that's not surprising with the VIX at 18. Really the only sector experiencing high IV is metals and materials, but unfortunately that ETF, XME, has a lack of liquidity. As do all of the stocks within that sector that have high IV.
EEM, the emerging markets ETF, looked like is was going to test resistance around 33.36, but it's down about 0.43 or 1.31% as of writing. That doesn't necessarily mean a reversal. So, if EEM tests that resistance and fails, I will contemplate getting short.
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