Random Thoughts

Introduction

This is just a random place to post a few thoughts. It is not meant to be a comprehensive review of my trading or my analysis.

February 29, 2012 - 2:44 PM (PST)

In response to an article on SeekingAlpha article about Amazon having low profit margins, I wrote:

You are bringing up several topics at once:

1. Their (supposed) lack of profit (i.e. low margins)
2. The high valuation (which is based on their growth rate).
3. Their lack of productivity growth which is expected when a fixed-cost company implements capital spending projects.

ANSWERS:
1. Their operating cash flow margins were 6-7 times their earnings margins for 2011.
2. This is the market's fault, not the company's. Criticize investors, not the company.
3. Although the fact that their capital spending has not yet resulted in benefits with respect to operating leverage, the thing that most people don't realize is that the bulk of the productivity benefit from capital spending come after the growth has slowed down and the company pulls back on capex. In simpler terms (and in Boston Consulting Group terms), it comes after the company has transitioned from a growth star to a cash cow.

Ever since Amazon made its first forays into non-book commerce in the 1990s, it was clear to everyone that Amazon was going to be "The Wal-Mart of the Web". They never planned on being a business with profit margins above the low-single digits. Like Wal-Mart, they planned on building out an infrastructure so that no one else could compete. Then scale the company over the next 35 years where you get to the point where you are essentially selling every product, to everybody, everywhere (figuratively speaking). I think that they can eventually scale to $1 trillion in sales in 20 years. With 4% cash flow margins and a 12X multiple, that's about a $500 billion company. Some of the commenters that are a little too quick-on-the-keyboard may point out that Apple's valuation is already at $500 billion (ironically reached for the first time today). The problem with Apple (and Google too) is that they are operating in an environment where they are attaining higher-than-normal economic profits. But their high margins are temporary. Why? Because every product eventually becomes commoditized. The author of this article fails to realize that Amazon's strength comes from the very fact that its margin are so low. No one in the world will dare to compete. Look at how KMart is doing competing with Wal-Mart. Do you think anyone would dare try to compete with Amazon just to end up becoming the "KMart of the web"? Apple and Google are riding an "innovation bull market" where they are anointed the kings of the business world. But with a 9% unemployment rate and Apple sitting on 1/10th of a trillion dollars, customers will eventually ask themselves why they are paying a premium price for simple electronic products just so that Apple can have more money in the bank. Apple's products will eventually become commoditized and Apple will likely become the Dell of the 2020s.

At the end of the day (or should I say at the end of the century), the low cost producer always wins. Amazon is positioning itself for those days right now, instead of waiting for them to happen.

February 8, 2012 - 7:19 PM (PST)

EA dropped after hours, after the CFO left the company. We'll see what happens tommorow. GRPN (GroupOn) dropped about 15% after-hours. When looking at my "Watch List" over the past couple of months, one of the obvious possible trades was to write call credit spreads on GRPN and LNKD since they are overvalued. And even though this over-valuation presents an opportunity, the problem is that these stocks are overpriced based on irrationality. And a mis-valuation based on irrationality is harder to predict than a mis-valuation which occurs in a more benign emotional environment (i.e. a sutuation where a stock just "happens" to be overvalued). Because of this, I held off on writing those spreads. This is an area I plan to explore more in the future.

February 5, 2012 - 4:27 PM (PST)

With the unemployment hitting a possible tipping point, it's possible that the market may be ready to enter an intermediate-term uptrend. I need to be careful about selling call credit spreads on stocks that are short-term overbought because they may continue to run up more. This happened to me in 2003. After the market made it's major bottom, it rose to where it was short-term overbought. I shorted a few stocks (YHOO and NET if I remember correctly) but they continued to rise. During my post-mortem analysis of my losses, I realized (when I looked at the weekly charts) that the stocks were not overbought on a longer-term basis. This is similar to what's happening now in some ways. The market is now making new multi-year highs which would seem, on the surface, to mean that stocks are overbought. But the market has spent a considerable amount of time (virutally all of 2011) consolidating near these highs. So this trend may continue for while.

February 2, 2012 - 1:02 PM (PST)

EA and BMC were both up about 6% to 7% after earnings, which was good. The EA spread I sold at 0.20 is down to 0.05. Since the spread is for March expiration, I can get a better return on that money going forward by getting out and selling another spread for a 25% return so I may do that.

XHB was unfortunately up another 22 cents to 19.45.

GOOG was a little more and TLT was fine.

The only notable move was that ANF was down about 14% from 47 to 40.36 based on earnings-related reasons. My spread is the 39/38 spread so it is still out of the money. The spread I wrote at 0.18 only went up to 0.26. I had a feeling that ANF might drop on bad earnings news, which is why the spread I wrote for my mom;s account had a 3-strike difference. Instead of writing a 43/42 spread (which I probably would have done about 100-lot), I did a 35-lot in the 43/40 spread. This allowed me to get a 23% return while doing a smaller options volume. Sometimes I write a spread so large that I don't have enough money to take delivery of the stock. In specific times (like this one), I will purposely write the spread with wider strike prices and do a smaller volume in order to ensure that I have enough money to take delivery of any stock thatI get assigned.

February 1, 2012 - 9:41 PM (PST)

EA was up 1 point after-hours after their earnings release. BMC looks unoved after its release. XHB was up .57 to 19.24 so my spread is in-the-money again - not a huge deal.

TLT, after going up for a few days and getting a little too close to my strike price, had a nice decline of 1.38, and was down even more intra-day. Although I am feeling better about it, the high - and somewhat inexplicable - volatility is still a considerable risk factor. A daily range of 30-40 cents would make me feel better than daily 2 point moves.

This high volatility is due to bullish and bearish forces facing off against each other. Although this duality of simultaneous bullish and bearish forces is not uncommon, these occurances are usually driven by technical factors. More specifically, one of the most common times these situations occur is when a growth stock has been going up for quite some time (perhaps a year or more) and is reaching a point where it is clearly overbough and possibly overvalued. Many contrarian traders come in and short the stock (expecting a pullback to occur), while opposing momentum traders buy the stock (expecting the new highs to lead to more new highs). One specific example - and perhaps the most well-known example - of this duality would be Netflix's (NFLX) extended and volatile consolidation last within the 200-250 range last year (2010).

TLT is a little unique because it is one of those relatively rare times in markets where there are polar forces facing against each other that are based predominantly on fundamentals. Bond bulls are going long based on the assumption that a Greece default will cause an unprecendented global meltdown; while bond bears are pointing to the fact that interest rates are at record-low levels while the economy will be rebounding in the future.

January 31, 2012 - 9:00 PM (PST)

XHB was down more to 18.67, which is good. And GOOG held up. EA and BMC were both very strong today and are 15% and 20% away from my strike prices, respectively. This gives me a decent buffer if I decide to hold them through earnings tommorow.

TLT was up another 1.38 to 120.85. There didn't seem to be any particularly bad news to make TLT jump this much in 2 days. It is probably traders placing bets against Greece. If TLT jumps more, it will definitely start to make me a nervous.

I wanted to (and was about to) sell 200-lot of the March SCHW 11/10 put credit spread at 0.30. Even though the stock is very close to the strike price, I think it is undervalued and I wouldn't mind taking delivery of 20,000 shres of SCH at 11.00. The market moved away before I could get the order in though.

January 30, 2012 - 4:00 PM (PST)

The only 3 positions of mine which mattered to me going into today were: XHB (because it is slightly in the money), GOOG (because it is a large position and not too far from the money), and TLT (because it is a large position in a voltile security).

XHB was down and closed under my 19 strike, which was good. GOOG held up. TLT was up about 12.5 points to about 119.50. This wasn't bad by itself, but I don't want it to remain strong going forward.

January 27, 2012 - 6:00 PM (PST)

XHB up a bit again to 19.20. EA and ANF were up good.

TLT and GOOG are the 2 positions which I care about now. My other ones are either doing fine. TLT was up a bit more. GOOG rebounded like I thought it would. It was up about 11.5 points.

Things are going very well right now. EA and BMC both have earnings on Wednesday after the close. FOSL has earnings on the 14th before the open. I have to decide whether I want to hold positions into those earnings.

January 26, 2012 - 6:45 PM (PST)

Relatively quiet day. XHB dropped back down to 19.05, and, more importantly, made a daily reversal after trading up to 19.55.

TLT rebounded 1.5 points, which is very good. The good unempolyment claims number that came out today increases the risk of a bond market drop over the next month or so, but it will also help neutralize a jump in the bond market due to any bad news out of Greece. GOOG was down another 1.5 points. Hopefully it has hit bottom.

January 25, 2012 - 6:00 PM (PST)

Minor stuff: XHB was up about 40 cents to 19.30. My spread is back in-the-money so I hope XHB gowe back down. FOSL and BMC were up even more. ANF rebounded more.

At the FOMC meeting today, the Fed didn't come out with any notable news. But the TLT was still (inexplicably) very volatile. It jumped 2.5 points and then came all the way back down and closed down a little.

GOOG was down about 11.5 points to 569.49. I definitely should have held off for a couple of days to write that put spread. One of my most effective techniques is to look at a stock which had a large 1-day drop (like 10%-40%) and then to hold off for about 2-4 days while the stock drops even more. Many times, traders will buy the initial drop thinking that the stock has bottomed out. But this initial gap down serves as a fake-out while the stock drops more for a couple of days. I think GOOG will bounce from here about 10 points or so and my spread will be 20 points out of the money. What GOOG stock does after that (and for the next 3 weeks before expiration) will be the key question.

January 24, 2012 - 6:00 PM (PST)

Nothing major happened today.

The good. BMC was up more. FOSL up another 2.5 points to new recent highs. I may look at getting out of both spreads. ANF rebounded 1.5 points. TLT was about even, which is good.

The bad. XHB back up 30 cents to 18.90. GOOG was down 4.5 points.

January 23, 2012 - 6:00 PM (PST)

I got out of the rest of my SCHW spread at 0.03.

Since XHB is up near its highs and I only had a small position, I wrote a 20/21 call spread to add to my 19/20 call spread. I tried to do 200 but only got filled on 50. Since I already have a 19/20 call spread written (a 200-lot), this had the effect of turning 50 of my 200-lot from a 1-point spread (19/20) into a 2-point spread (19/21).

The XHB has been so strong lately that I think that it probably won't drop too much even though it is overbought. So I wrote put spreads on it and turned my call spraeds into an iron condor.

My trades today:

Bought to close 199 SCH February 10/9 put spread at 0.03
Sold to open 50 XHB February 20/21 call spread at 0.15
Sold to open 200 XHB February 16/17 put spread at 0.08
Sold to open 50 XHB February 15/17 put spread at 0.12

TLT was down about 75 cents today to 16.24, although it was also about 75 cents off its low. I would prefer if TLT came back up a point or 2 because I don't want the bond market to drop since so many people seem to be anticipating it. This would make it easier for the drop to gain momentum.

GOOG was even today.

January 20, 2012 - 4:00 PM (PST)

I got out of 135 more of my SCHW spread at 0.03. I still have 199 on. BMC was up a lot today and I might look to get out of that. ANF was down sharply but is holding support.

XHB dropped about 50 cents and my mom's 19/20 call spread expired out-of-the-money.

GOOG was down about 65 points today to 585. I wrote 100 of the February 560/555 put spread at 0.94 (I wrote 20 for my mom's account). It is a little close and I am wondering if I was too quick to put on the trade, but we'll see what happens.

TLT was down another 1.32 today to about 117. My call spread is doing very well but my put spread jumped to about .23. I definitely should have waited until now to write the put spread and should have done the 110/109 spread. I think the market is actually getting oversold now and will bounce sometime over the next few days. I would like volatility to go down too. I don't want the market to move a point and a half every day.

My trades today:

Bought to close 135 SCHW 10/9 put spread at 0.03
Sold to open 100 GOOG 560/555 put spread at 0.94

January 19, 2012 - 5:00 PM (PST)

SCHW was up a lot today so I tried to get out of my spread. I was able to get filled on 116 out of the 450 at 0.03.

EA (Electronic Arts) was down a lot today. It is oversold, at support, and is undervalued so I wrote 310 EA March 16/15 put spread at 0.20. This isn't one of my favorite companies to play because I don't know it too well (Although I made some money on it last year) so I only put on a medium-sized position.

XHB stayed up there. Tommorow I may have to take a loss on it for my mom's account.

My new trades today:

Sold to open 310 EA March 16/15 put spread at 0.20.

TLT was down another point and a half today (to 118.32) which is very good for my call spread. But my 112/113 put spread which I wrote yesterday at 0.09 ballooned to 0.19. There is still plenty of wiggle room though.

January 18, 2012 - 7:30 PM (PST)

ORCL and FSLR were both up a lot today and I tried to get out of both of my spreads since there is not too much premium left in them. I got out of 420 out of the 500 ORCL spread (which I wrote at .22) at .03. I left on the other 80 since I wrote a call spread on those earlier so it wouldn't free up any margin to take off the other 80. I got out of my FSLR spread (which I wrote at .68) at .08.

ANF was up a lot today (2 points to 47.40), which is good because my mom's credit spread was written at 43, which was only 2 points away before today's jump.

XHB was up about 65 cents today to 19.12. I have written 19/20 call spread for both my account and my mom's account. My spread is in the February options, but my mom's is in the January options which expire on Friday, so it will be good if XHB will drop below 19 by Friday's close. If I have to take a loss then it won't be a big deal because both trades are only medium-sizd trades.

TLT was down about a point and a half today to 120, which was very good. I have some breathing room between the market and the 123 strike price.

While the market was down, I wrote 600 of the 113/112 TLT put spread at .09 and turned my call credit spread into an iron condor I also wrote 60 of the TLT out spread at 0.08 for my mom's account. Interestingly, I started to get filled on my spread at 0.09 before my mom got filled at 0.08 (see the picture below).

I wanted to write out spreads on NYX, NTAP, and EA about an hour before the close but they all jumped before I had the chance.

My trades for today for my account:

Bought to close 420 ORCL 23/22 out spread at 0.03
Bought to close 100 FSLR 26/23 put spread at 0.08
Sold to open 600 TLT 113/112 out spread at 0.09

Looking at it now, I think I should have waited about 2 or 3 more days for the market to drop before writing the put spread. I got in trouble last year when I wrote a call spread at the top of the silver market (when silver was at about 47 cents) and immediately wrote a put spread at about 37, assuming that silver wouldn't drop 25% in a month, which it did of course. In this case, I think that the economy will be weak enough to keep the bond market from crashing within the next 1 to 2 months. I also think the global demand for Treasuries will kept high for at least a few months while there is a flight-to-quality into low-risk yields.

VNM has been up a lot lately - about 10% in a week and a half. I was right about that market even though I didn't make money. My VNM trade is a great example of a really bad trade. I had a correct hypothetsis but bad execution (although I made about 3% on my mom's account in 1 week, which is decent).

January 17, 2012 - 8:00 PM (PST)

TLT ticked up about 50 cents. It hasn't broke above the resistence (the old highs) from 2 weeks ago, but since I am close to the money and I have a max loss on this trade of almost $40,000, I am a little nervous.

The rest of my trades were fine.

January 16, 2012 - 7:00 PM (PST)

The market was closed today but since it is Monday, the global markets are open. The European markets brushed off the downgrades from Friday, which is good for my position in TLT, but this article talks about how the markets care more about how the situation in Greece is going to play rather than the downgrades.

January 13, 2012 - 9:00 PM (PST)

ORCL, SCHW, and ANF were all fine. FSLR seems like it might be on the verge of a breakdown back in the 30s. My spread is at 26 so I am not particularly worried. XHB was down 22 cents like I thought.

I've been trying to get out of my SCHW spread @ 0.03 and ORCL spread @ 0.05 but they aren't getting filled. Since ORCL is up so much, I entered an order to write a 500-lot call spread and turn my put spread into an iron condor. I only got filled on 80 of them. As far as new trades, I put on a large position in TLT (and ETF that tracks the 20-year Treasury Bond). Here are my trades today:

Sold 80 ORCL February 30/31 call spread @ 0.07
Sold 600 February TLT 123/124 call spread @ 0.35 for my account
Sold 60 February TLT 125/126 call spread @ 0.25 for my mom's account

Regarding TLT, the bond market has been nearing its extreme highs of the past few months based on re-ignited fears about Greece. I think that most of the bad news is baked into the market. The other thing to remember is that whether or not you think that the Greece situation will end god or bad, the fact that it is nearing its "end point" is, by itself, a good thing. It takes away the uncertainty in the market. The other major issue affecting the bond market - the economy - also looks like a non-factor due to most of the bad news already being bakes into the market. TLT gapped up today pretty far and is hitting resistence of 2 weeks ago at around 121.50.

Here is the intraday chart which shows where I got in.

I almost didn't get filled on the order because I had the order in at 0.36 and wasn't getting filled. I wanted the market to tick up a bit and trade into me, but I didn't want to lose out on a fill, so I lowered the order to 0.35 and got filled. This is important to point out because there have been many times when I will lose out on a fill because I am waiting on an extra penny on an options spread. If I am selling a spread at 0.10 then an extra penny can be enough to hold out for since you are getting 11% more premium selling the spread at 0.10 instead of 0.09 - but at 0.35 an extra penny is only giving you 3% more premium.

I am a little nervous about the TLT spread because I think I might have wrote it a little too close to the money. There are times where you can get "premium greedy" and going to close to the money to get a high return on your margin. I am also worried about the low volatility in the market right now. I shorted the TLT because I thought its large rise over the last few months indicated that the bond market has now reached a top (within a couple of points). But low volatility is often a precursor to a large move - and if either the stock market or the bond market itself became highly volatile, this could trigger the bond market to take another leg up into uncharted territory. The following chart shows the rise in the TLT (the black line) vs the VIX (the blue line).

This second chart shows the rise in TLT vs the large drop in the implied volatility of TLT options (a measure of the expected volatility of TLT itself).

To further compicate things, after the close, a WSJ blog post cited a bunch of downgrades in the Eurozone. Hopefully this news was already priced into the market. I believe it is.

January 12, 2012 - 7:00 PM (PST)

SCHW, ORCL, FSLR, and ANF were all fine. BMC was up about 3%. FOSL was up about 7 points to so (about 8%). XHB was even. I'm lokoing for it to drop over the next couple of days.

For my mom's account, I put on the same FOSL trade as I did for my account yesterday.

Sold 20 FOSL 70/65 put spread @ 0.85. I was able to get filled before it rose.

Her other positions overlap with mine.

January 11, 2012 - 6:00 PM (PST)

SCHW and FSLR were up more today. ORCL was about even. The spreads are trading for such low values (about 3% to 6%) with 5 and a half weeks that I am thinking about buying them back and re-deploying my money in other positions. I'm not sure yet though.

The XHB spread closed up 30 cents to 18.65. This is getting close to the money, but I'm not worried yet. BMC was fine.

I put on the following new trade:

Sold 50 FOSL (Fossil) 70/65 put spread @ 0.85. Normally, I write put spreads on stocks that are sharply oversold. But this is one of those trades where a stock has fallen and traded sideways and looks like it has built a base and is looking like it will rise even though it is not sharply oversold.
Sold 350 ANF (Abercrombie & Fitch) 39/38 put spread @ 0.18. This is the trade I should have put on my mom's account a few days ago. I should have waited for the stock to drop a couple of points.

My mom's account: I put on a trade on XHB which was a duplicate of the one I put on in my account yesterday.

Sold 60 XHB 19/20 call spread at 0.11.

In her other positions, ANF and BMC were flat but possibly forming a bottom here.

January 10, 2012 - 5:00 PM (PST)

VNM gapped up and traded around 14.95 for quite a while. Although I wanted to get out at 14.98, there were only a few prints at that price and I knew it would be hard to get filled on 7,900 shares so I put in an order at 14.95 and got filled there for a small $220 loss. My previous options trades (ORCL, FSLR, SCHW) were up more.

With money freed up from VNM, I also put on 2 more options trades:

Sold 118 (partial fill on an order for 350) BMC 29/28 put spread @ 0.18
Sold 200 XHB 19/20 call spread @ 0.25

The BMC trade is just a duplicate of the trade I put on for my mom a few days ago. The XHB short trade is based on the HomeBuilders index ETF being at about a 6-month high and appraoching resistance at 18.50 to 19.00. The spread I chose is pretty close to the market but the size of the trade is somewhat small and the ETF is not too volatile (with not too much gap risk).

My mom's account: BMC and ANF were down a little but not too much.

January 9, 2012 - 4:00 PM (PST)

My account: My option trades (ORCL, FSLR, SCHW) were either up or even. VNM was up another 20 cents to close at 14.60. I am looking to get out tommorow at breakeven if it has another decent up day.

My mom's account: I sold her 2,800 shres of VNM at 14.55 for a quick 2.5% profit in 2 trading days.

BMC was down a little more. ANF traded down a dollar but closed up a dollar.

January 6, 2012 - 3:00 PM (PST)

I knew VNM would gap down today based on the Vietnamese market trading down overnight. I put in a limit order for my mom's account for 2,800 shares at 14.20 before the market opened.

VNM gapped down and I got filled right away. VNM traded higher and closed at 14.40. Even though it was only up 8 cents (0.5%), there were 2 big positives. First, it was up even though the Vietnamese market was down, so the ETF will liekly go up even more when the Vietnamese market rebounds over the next couple of days. And second, VNM make a daily reversal, signaling a multi-day rise from here.

My account: Mo options positions (ORCL, SCHW, FSLR) were either up more or even.

My mom's account: ANF was down another point. It is only 2 points away from the strike price with 6 weeks to go until February expiration. BMC was also down over 3% to 32 with the spread at 30.

January 5, 2012 - 2:00 PM (PST)

VNM was down about 1% today to 14.32. I'm looking for a nice bounce very soon. It it bounces from here it may get back to breakeven at 14.98. If it drops down to 1400 then it may only bounce back to 14.50 or so, at which point I will probably take a small loss.

My account: My option positions (ORCL, SCHW, and FSLR) were all up alot.

My mom's account: BMC was up a little, but ANF was down even more - not good but not too bad.

January 4, 2012 - 8:06 PM (PST)

My account: VNM was down 1% today. Nothing big.

My mom's account. My trades:

Sold 35 of the ANF (Abercrombie and Fitch) February 43/40 put credit spread @ .57 for a 23% profit at expiration.
Sold 50 of the BMC (BMC Software) February 30/29 put credit spread @ .18 for a 20% profit until expiration.

The BMC spread ended up pretty much even, but ANF was down a lot for the day and the spread ended up closing at .69.

The BMC trade was a much smaller trade than I normally would have done. This is for 2 reasons: (1) BMC has earnings come out before expiration, so there is a decent chance of a large move (and therefore, large loss). (2) I haven't been in a postion to put on new options trades. After my December options expired on Dec 16th, I made a quick $18,000 or so in FSLR in about 2 days. I also wrote the following option trades for my account:

12/19/2011 - Sold 450 SCHW February 11/10 put credit spread @ .20 for a 24.7% profit at expiration.
12/21/2011 - Sold 500 ORCL February 23/22 put credit spread @ .22 - collecting $10,913 in premium for a 28% profit at expiration.
12/21/2011 - Sold 100 FSLR February 28/25 put credit spread @ .68 for a 29% profit at expiration.

All of these positions are doing very well.

But since then, I have felt like only trading part-time. I have been busy with other things and I haven't had time to do enough research in order to find new stocks to write options on. And my sleep cycle is not correlated to the market right now. I have made the mistake of putting on some large half-hearted options trades while not paying complete attention to the market in the past and getting burned.

January 3, 2012 - 8:50 PM (PST)

VNM was up 1.4% today. I got out of the position for my mom's account @ 14.65 for a very small profit. I plan on getting out of my tommorow if it is up a little more.

December 30, 2011 - 2:00 PM (PST)

VNM was up 1.5% today. It was the first up day in about a week and a half. I'm looking for more mild gains next week.

December 29, 2011 - 8:00 PM (PST)

VNM flat today. Vietnames stocks were up 0.3% tonight, so VNM will probably be up a little tommorow.

December 28, 2011 - 8:00 PM (PST)

The Vietnamese market was even last night, so we'll see what happens tommorow.

When I do sell VNM, it is not as important that I am watching the market all day to get the best price because most of the move in foreign stocks (ADRs) and foreign ETFs that trade in the U.S. will be a result of their moves the foreign market. The American shares are simply pricing in the (dollar-adjusted) move that the stock made in its home market overnight. Consequently, most of this move comes at the open, and the range after the first half hour will be very tight. The most common pattern is a big gap at the open and then trading sideways the rest of the day, like in the chart below of VNM over the last few days.

This is the first pure swing trade I have done in proabbly a couple of years. There have been a few times I have taken a position in stock, but only becuase I had options that I had written that were excersized by the buyer. I don't want to spend too much time in this trade because I want to get back to my option writing.

December 28, 2011 - 4:00 PM (PST)

The Vietnamese market (Bloomberg) were up about 0.5%, but the VNM ETF was down over 1%. It could have been currency-related since any foreign stock is both a stock and currency position rolled into one.

December 27, 2011 - 4:00 PM (PST)

The Vietnamese market was down 1.4%. With yesterday's down move of 1% added on while the US markets were closed, VNM should have been down about 2.4%, but it was down about 3.5% today. I bought 900 more shares today for my own account at 14.56 for an average price of 14.98. I planned to buy more but I forgot that I had a bunch of option positions on. I don't think that I am going to be looking for a profit on this trade. I am probably just going to get out at break even since that is a 4% move up from here.
I bought 3,500 shares today at 14.57 for my mom's account.

December 26, 2011 - 4:00 PM (PST)

Vietnam was down about 1% with the US markets closed.

December 23, 2011 - 4:00 PM (PST)

I got filled at 15.03 - 1 tick off the post-open low. I'm only looking for a quick 2-3% jump, with only 2-3% risk. Normally I wouldn't bother with such a small gain/loss, but ETFs which are based on a very broad index (like the S&P - or a country index) don't ever gap down 20-40% like stocks such as NFLX or GMCR do, so there isn't much gap risk. The maximum daily risk tends to be around 1-3% - assuming you are not in a particularly volatile period. This allows a swing trader to play these indexes for small 2-3% gains over 1-2 day periods. I used to do with occassionally with the QQQ a few years ago. Barring any major currency-related crisis drop, things should go OK.

December 23, 2011 - 9:58 AM (PST)

The Vietnamese ETF (VNM) is making new 52-week lows. This is a market which is the fastest growing trading partner of America. Apparently, the market is heading down because of inflation pressures, which (from what I've read caused a currency devaluation some time in the past). I found it when scanning BarChart's new lows list. I have an order for 7,000 shares @ 15.03. I wouldn't mind averaging down to 14.75 next week. I'm just looking for a 3% (or so) move in a few days. I'm not concerned if I miss it. There is very little volume in the stock and the spreads are wide.
Here are a few links:

SeekingAlpha article on Vietnam that talks about the rise in consumer spending.
Minyanville article that talks more about consuer spending.
MarketWatch article that shows Vietnamese high growth.
Seeking Alpha article which talks about the VNM ETF.

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