Monday, April 25, 2011

ZB Update

I was short weekly calls on ZB that expired last Thursday before Easter at the 120, 121, and 122 strikes. The 121/122 expired worthless but I chose to not buy back the 120 at a loss and rather inherited a short position at a cost average of 120'14. Even though I had previously stated I was going from bearish to neutral on ZB, I was willing to stay short this one contract until/unless we broke to a new high. We had been in a tight one-point range for the last four days but broke above it in after hours today so I took the loss for (-$1125). In retrospect, it's interesting that last week in my post I said my gut tells me we're going to 122 so I wasn't looking to get short until then, but yet I wasn't the least bit interested in playing it from the long side up until that point. That tells my own biases were a little stronger than common sense. Also mentioned in that previous post, I have followed through and entered some OCO orders to get short at 122 with a tight stop.

I'm not about to predict what, if any, new information comes from the FED on Wednesday, and therefore won't try to predict how the market might react. I'm kind of in a wait and see mode right now for an indefinite period and it could be that I'm done with bonds for now, we'll see. It's been a good four months trading around ZB so I need to make sure I don't give back my profits, just need to be patient and only enter new trades for the right reason if it presents itself.

Closed for a loss when we broke 121'18 (-$1125)


  1. I just entered in to shorts at the top of the trading range at 122'08 with a tight stop at 122'14. If this gets stopped out I'm looking to do this same type of trade at the next technical levels near 123 and 125.

  2. My trailing stop was just triggered in after hours, was taken out at 121'27. It's a very small gain as entry was short at 122'08. I'll probably enter the same exact trade but with an even tighter stop loss, like short at 122'08 and a stop of 122'12. I really don't have a feel for what's going on here compared to the last four months when at times it's felt like I had the illusion of control. So this being the case I'm going to tighten my stops and take profits quicker until/unless I can get back in the zone.