Diary of a Financier

From the Trading Desk: Weekly Update

In Trading Desk on Fri 1 Apr 2011 at 18:05
  • Closed: Treasury pair trade (+0.76%), EXC (-7.48%), TDW (+21.10%),
  • Opened: ACI, DCTH

Head over to the Trading Desk for the updated portfolio.

Finally closed that convoluted 4-pronged pair trade in the Treasury yield curve; total return ~+0.76%, including dividends.  These pair trades are all working by providing moderate return with low-risk, but they’re a heavy burden.  I find them more effective in the short-term, to capture divergence between to sector peers who’re caught in opposite trends:

Pair Trade- Closed +0.76%

We opened the Arch Coal (ACI) position to gain coal exposure, as I mentioned at the start of the Japan fiasco.  Plus, there’s a new stake in Delcath Systems (DCTH), for which I have some high conviction.  I performed a lot of due diligence on that one, so I’ll probably drop an entry on it in the near future.

What else?  The Lockheed Martin (LMT) position is wearing on me.  Since I’ve gotten more than I expected out of it, some would tell me to shut it down.  But it’s a winner, so I’m letting it run.  I’m anxious though; if it doesn’t keep moving toward $86.75, I’ll pull the trigger.

Dean Foods (DF) disappointed at the end of this week by shying away from a weak resistance at $10.60.  If this is the reaction to their settling [conceding] an anti-trust lawsuit, then I’m not worried.  It’s starting to look range-bound between $9.50-$11.  I’ll worry when it tests that $9.50 support, but the 50-day MA just bullishly crossed the 200, so I’m still constructive.

All is well.

–Romeo

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