Wednesday 20 April 2011

Working to scratch a bad entry

Just now I was looking to sell above 20 in the bund/bobl/schatz fly. I buy the bobl, sell the bund and everything tanks and I miss the schatz and end up selling 17s when its now 18 bid. A disaster having waited all morning for a price to trade to now find myself offside. It then went 20 bid 26 offered (it has a 6 tick spread) and then back down to 17 bid 23 offered. If you want to buy 17s and its 17 bid you will need each market to trade into you in turn without moving away from your ques so realistically you end up with 18s at best and typically around 19-21s.

During this very very small move up and back down all within 35 minutes, despite selling 17s I managed to make 5 ticks using an aggressive style holding a 3rd clip for minimal time possible. I start by selling a 2nd clip at 24 and then I go to take it off and get a quick profit using bobl and bund so remain short 2 clips, but improve my overall position. I then buy bobl looking to put a 3rd clip on but take immediate profit on it (equivalent of 3 ticks in the fly). I then sell 26s on a good leg and buy back at 25. I don't sit and wait for a better opportunity as I want to be in and out very quickly as having 3 clips on so tight together is risky. I then buy back everything at 21s, giving me 100 euros profit on a bad initial entry. Note I don't try to buy the last clip back at 17 because it already moved against me and now 20s are looking like a good buy and its seems im more likely to be able to sell above 21s, so I buy it back at 21 (aiming at 20s) and now I am looking to sell above 23. Even though I made most the money using 1 or 2 markets instead of all 3. I still would have scratched my 17s if I don't count the outright bobl trade and the bund/bobl trade. Just an insight into what im doing each day! :)



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