interest rate bubble play

this trade will give me a time cushion if I'm still early with the 20 year T-bill correcting.

To fund my 110 JUN09 put I will short puts in the front months.

1/09/09 update
mark is approx 112, so the direction has been in my favor and with true textbook performance my short Feb 110 put has been deflated by the vega decrease and my further dated long 110 put has stayed relatively the same. This has resulted with me being up $70+ and the standard deviation for Feb does not go outside my P/L graph on this trade, Im safe up or down 15% on this one. I also have rolling capabilities/options with this one. Great trade thus far. I will get out of the trade if I up 30% on risk.
1/13/09 update
mark is app. 113, up only 1 tick from last update but the vols have come in considerably doing some damage to this P/L graph. The biggest hurt is to my JUN 110 PUT the vols upon placing trade were trading at 37 today there at 29. My short put has offset some of that damage but the P/L graph has shifted from making close to $400 on max profit to now only making only half of that.

Take Away, mitigate the vol risk when placing contrarian trades, cause if you are right the vol will most likely go against you and take away some gains.

JAN08 Trade Log

SPY ratio IC trade with bearish bias, executed the trade 12/1/08
12/10 closed the call side out as my bias turned bullish short term.
closed call side out for a .16 loss (2)
12/17 closed out 1/2 of the put side for .09 = .13 (1) gain
trade balance is -.19 with 1 contract left on the put side 74/73 for .21
Trade will most likely be a wash...
take away: Because I was wrong initially I panic closed my call side and in hindsight I would of been better off keeping it on. Again another reason to be more mechanical in this market by setting a mental stop on the trade if it goes against you to this amount take this action if it works take profits at this amount. Adjusting this pre-set plan as the trade moves along must be done with a detailed rationale. Underlying methodology should be not loose more than 1.5x your cash flow or 1.5x your avg. gain on a trade, the idea being that you don't want your loosers to engulf your winners.

12/12
QQQQ and EEM IC trades are biased bullish for year end rally and or trading range: Q's trade was placed on 12/12 and the EEM was placed on 12/15 both are approx up 10%.
12/18
EEM mark25.47 ratio IC:
shaved off some pos deltas by closing out 1 of 3 EEM 21/19 put vertical for a +.19 profit, position is now a little more even on a p/l graph (lowered my downside risk as my opptimism is running thin for a year end blast!)
12/29 mark 24.11
closed postion for a total gain of $100 on $400 of risk or 24% Return.

QQQQ mark 29.91 ratio IC:
shaved off (1 of 1) 28/27 put vertical for a +.10 profit
still biased bearish but just reduced some downside risk in the trade.
Volatility has been vacuumed out over the past few days and has profited my pos theta I>C trades! off about 10points in the VXN or approx 20% to the 45 level, the vix is trading at the same price but has seen a larger % move down during the same period.
12/30 mark 29.35
closed out completely for a $82 profit or 23% return on risk ($350)

Light trading for Jan08 proved profitable as my negative vega, income postions blossomed with the vix/vols falling to the low 40's from the high 50's when placing the trades. Also the range has been tight letting my trades collect theta decay and vega premium drop.