Tuesday, 29 April 2014

KLSE: Top up CHHB

It has been some time since I posted my last transaction, but it doesn't mean that I did not buy or sell in these periods.

Today I queue RM 1.55 for CHHB, a share by guazi in Investalks.


CHHB transaction



Why would I buy this share? 

The chart is beautiful, is very much like INGRESS lasty year:  Why would I buy INGRESS? Price up within short time, then price consolidation with low volume, to "wash out" contra and uncertain shareholders.




Why is it 1.55?  

Well, first of all I am very "prudent" in buying something, including stocks. I wouldn't pay full price for something - a typical Malaysian style, and will always bargain: 

kurang sikit boleh tak? (Malay)

eh kah kiam oh? (Hokkien)

不能再便宜了meh? (Mandarin) 

can you give a better price? (English) 

So I will feel reluctant to even queuing for RM 1.56.

Secondly, 1.55 is the lowest price since 21/4/2014. Because at that day there was a slight movement in the stock with volume. I believe this is a relatively safe entry price.  

Target price - No target price. If volume come and I find a better chance, then I will change.  

Saturday, 19 April 2014

NYSE&NASDAQ: What is buy to open, buy to close, sell to open and sell to close?

When you are on your first time to trade options, you may be baffled by the choice of transactions:

buy to open (BTO), sell to close (STC), sell to open (STO), buy to close (BTC)

First time seeing this: what the heck are these? How come buying something can close something (buy to close)? How come selling something is to open something (sell to open)?

In stock transactions, there is only buy and sell, which is already self-explaining. But for options, because you have the right to buy or sell, every time when you want to OPEN a position, you need to choose if you were to OPEN a BUY or SELL position, i.e. buy/sell refers to the transaction you would like to make, whereas open/close refers to your position, whether you would like to open or close your position.

Assuming that currently you do not hold any open position (i.e. do not hold any options):

i) when you want to buy a call or put options, you choose BUY TO OPEN. When your transaction is matched, then you will have an open position. This open position will then required to be closed on or before expiration, e.g. if you wish to close earlier, then you choose SELL TO CLOSE, since you are SELLING your options and at the same time CLOSING the position.

ii) when you are selling a call or put options, you choose SELL TO OPEN. Then you will have a some kind of equivalent "short" position, e.g. when you sell 10 contracts, you will have -10 contracts for that options. You will then require to CLOSE the position by BUYING back, i.e. BUY TO CLOSE.

In short, if you were to commence a new trade, and you wish to be the buyer, then you choose BUY TO OPEN. Otherwise, if you want to be a seller, then you choose SELL TO OPEN. 

Hope this thread will clear the doubts of many options beginners, as I was also confused by these terms at first.


Friday, 4 April 2014

2014 Q1 Review

Return: satisfied.

Transactions: 3

1. Top up PNEPCB
This transaction did pull up my average price. So I actually endured the "pain" when I topped up -- already 2X of my first entry price, how could I still buy it? But I don't want to regret, and this share did not disappoint me. It "hurts" me in the sense when seeing the % return "decreased dramatically", however, in terms of amount, the return is of course higher. 

2. Buy INARI-WA
I used to think that an investment of less than 2k wouldn't make me any huge return, at most a few hundreds in short time. But INARI-WA has really "broken my glasses". For this small amount of investment, the return is really surprising in 1 month time. This shows the power of investment, of how money is being duplicated. 

3. Buy CHHB
Clearly a "follow wind" trade, from guazi in Investalks. Buy at low volume, not too bad. 

Dividends 2
1. INARI 1.5 cent
2. INSAS 1 cent

Review:
This results show that I don't have to trade frequently to pursue for huge return. In fact, buy and hold may be the best way for high return - just do nothing and wait for the return, isn't this the best part of investment?

Yes, I could have sold INARI at high price and then wait for adjustment and then go in again, but how could I catch the moment precisely? What if I miss it, and then just let the rest of the return gone?

Yes, I could have sold PNEPCB on 14 Feb 2014 @ RM 0.84 and switch share for another return. And until today it did prove working, since PNEPCB still hovering around this price, but WHAT IF? I am loyal to this share, really feel reluctant to sell at this price though.

After all, it is easier said than done. When my capital gets larger, when I have some cash to play really short term, then I can go for different trading style. For now, I am satisfied with my return.

Thursday, 3 April 2014

NYSE&NASDAQ: March options virtual trades

Mar 14 options virtual trades, expired 21 March 2014.

Mar14 virtual trade

1. BAC, return of 33% while the mother share rose 1.2% in that particular period. (magnified power of options, just like call warrants)

2. JPMorgan Chase Co. (NYSE: JPM), advanced US 3++ in 1 week, or 5.93%. I bought the option at $0.98 and it ended up with $3.60. A return of 267% in 1 week time, not bad right? This is the kind of return in US markets.

3. TSLA, a recently hot stock in NASDAQ, where the call option is out-of-money @ strike price of 250, i.e. options expired worthless. A loss of 100% of the capital. 

Not too bad when you are a buyer and you bought at the right trend - unlimited profit and a limited loss of 100%. In real trade I would chose those expire at least 2 months later, so that the price fluctuation will be lower. Still a lot to learn for this financial derivatives.