Jun 30 Options Writing Trades Update

The Nikkei average shed 62.98 points to 13,481.38, falling for a eighth straight day, the longest losing streak since last November. Oil prices surged above $143 a barrel for the first time ever Monday & a stronger yen did not help the situation.

The Week Ahead

US Market participants get next Friday off in observance of Independence Day. The shortened week is packed with economic reports, which will keep traders busy leading up to the extended weekend.

Last Friday, Japan report annual consumer inflation accelerated more than expected in May, hitting a new decade-high on surging energy and food prices. In addition, renewed concerns over the global credit crisis added to the gloom. The Nikkei is expected to face continued pressure this week.

Japan inflation at 10-year high

The CPI data further highlights the policy dilemma facing Bank of Japan: rising inflation coupled with a slowing economy. Economists are forecasting virtually zero growth or even a contraction in the world's second largest economy in the April-June quarter and over the months ahead.

Jun 27 Options Writing Trades Update

Dow plunge to 21-month low & surge in oil price rattles Asia investors. Japan's Nikkei share average was on course for the worst first-half performance since 1995. In the current strangle strategy that I employ (where I sell to both sides of the market i.e calls & puts), the calls premiums are "decaying" nicely. It's the puts that are moving against the portfolio. But for anyone who has ever "rode out" a naked option sale moving against him, the ride can get bumpy at times. Regardless of ones ultimate conviction, and aside from the fact the option is nowhere near going in the money, a continued sharp move in the underlying towards the strike can make one quite uncomfortable, both margin-wise and from a psychological level as one watches the option value rise. Keeping a close tab on the market is in order this period.

Jun 26 Options Writing Trades Update

The Nikkei stock average edged down 0.1 percent on Thursday, extending its longest losing streak this year to a sixth session. Japanese consumer prices, jobs and industrial output data are due out on Friday morning & will be closely watched.

Jun 25 Options Writing Trades Update

The Nikkei slips for 5th straight days but is still holding out pretty well I must say with support at around the 13900-14000 levels. I am looking to add more Sep calls to the positions at the next opportunity to complete the Sep income set up.

Jun 23 Options Writing Trades Update

Asian stocks tumbled Monday. The Nikkei lost 84 pts & closed at 13857 but was off its low of 13667 or -275 pts from previous close. According to some analysts, Japan's business outlook remains steady with growth in Asia.... its not good in the US but its bottoming out plus the yen is weak. But of course, sudden oil spikes & poor exports performance could change all these. Nonetheless, volatility is expected in today's markets.

The week ahead

The focal point next week will be the FOMC policy announcement on Wednesday. The market expects the fed funds rate to remain unchanged at 2.00%, but uncertainty remains & the wordings of the policy directive will be closely watched. In addition, market players will also be keeping a close eye on economic data. The consumer confidence, durable orders, new home sales, existing home sales, and personal income and spending reports just to name a few. With Friday's steep losses on Wall Street, the Nikkei will face some head winds into next week. This might mean that the N225 Aug Puts will start to look attractive again & can be considered for adding into the positions to complete the Aug's income set up. Should the index at any point bucks the trend, it will be present a good opportunity to take on additional N225 Sep Calls.

Jun 20 Options Writing Trades Update

The Nikkei decline a further 188 pts Friday. The Tokyo market's fall came despite overnight gains on Wall Street and a sharp rebound by Chinese stocks. According to some market analyst, foreign investors who bought Japanese stocks in April and May as they raised their investment stance on Japanese stocks to neutral from underweight, are now taking a breather after buying to that level.

Jun 19 Options Writing Trades Update

The Nikkei average lost steam Thursday & returned 322 pts or 2.2% back to the market. This following Wall Street's dismal performance in the last 3 trading session & a firmer yen. I wrote additional N225 Sep 10000 Puts for 35 pts.

Jun 18 Options Writing Trades Update

The Nikkei traded cautiously upwards Tuesday but nonetheless posted a respectable 104 pts gain. I wrote additional Aug 16500 calls for 25 pts. I am still looking at the Sep calls & puts to further add to the positions.

Jun 17 Options Writing Trades Update

Japan's Nikkei stock average traded in a tight range & ended flat on Tuesday after the sharp gains from previous session. I wrote additional but limited Sep 17500 call options for 25 pts in the morning. However, from the afternoon session, the Sep futures are trading relatively strongly up perhaps taking its cue from the US & UK futures. It appears that the Nikkei will be positive bias this week presenting more opportunity to write the Sep 17500/18000 call options. We shall see.

Jun 16 Options Writing Trades Update

The benchmark Nikkei rose sharply up some 380 pts Monday as with most other major Asian indices. I wrote limited N225 Sep 17500 & 18000 calls for 25 pts & 15 pts respectively.

The Week ahead

I am back in Singapore after 10 days of break. Its nice to be back. Me & my wife resolve to live heathier in Singapore after 10 days of detoxing...eating fresh fruits, vegetables, seafood, green tea & coupled with lots of walking & uninteruppted 7 hrs of sleep everyday. It was a refreshing & rejuvenating trip. I am glad that I made that trip.
Meanwhile, Wall street ended a turbulent week with a sharp gain on Friday after inflation numbers came in within expectations & an easing in oil price. The coming week isn't action packed but it will be closely watched, with earnings results from three major Wall Street banks and several potentially market-moving economic reports. As for the Nikkei 225, I am seeing good support at around the 14000 levels & thinking more upside potential next week & so will be looking to write the Sep calls (17500 and above). I will add a few more Aug puts (9750 & 10000) along the way if opportunity permits...since the premiums still look attractive to complete the Aug's income set up.

Jun 12 Options Writing Trades Update

Last night, I went to a "mini bar" with my brother in law Kyoichi. It was one of those joints that can seat no more than 10 people around the counter drinking & eating oden. You have to know the owner & the company to feel comfortable. It was a brand new experience for me. For the Japanese men & women who "don't like" to go home too early yet, its a nice place to seek solace from the stress of day, unwind & enjoy the company of like minded professional chit-chatting about any topics that come to mind.
Wednesday was an ugly session for Wall Street, with the Dow dropping more than 200 points as financial stocks fell on renewed write-down concerns. Oil prices surged 4.0% and commodities advanced 2.7%, which fueled increased concerns over global inflation and interest rate increases. Asian markets was a sea of red Thursday. I wrote the N225 Sep 10000 Put option for 60 pts.

Jun 11 Options Writing Trades Update

2 more days before we bid farewell to Japan & head on back to Singapore where the routine begins. Today, we walked the Shizuoka streets in the morning to shop for fruits & vegetables. After that, we went to the Abe river to catch some minows. No catch though but we enjoyed soaking our feets in the cold river water. For lunch, we had a simple meal of rice balls, left over stew, chicken yakitori & most interesting of all, a huge young onion (size of a baseball & cooked via microwave for a few mins). It was sweet & juicy. I thoroughly enjoyed it. This is a first for me in terms of eating a big onion by itself. I must say that food taste their best in the simplest form. For dinner, we are going to have pot sticker + ramen combination. I think I 've put on a few kilos more just in this few days. 8)
Meanwhile Wall street traded mixed & undecided Tuesday. Asian stocks follow suit Wednesday. US Fed officials have made it sound of late that they are most likely done cutting rates, and that the next move is likely an increase in rates in Sep. The hawkish comment sparked a rally on the dollar. This bodes well for Japanese exporters. The Nikkei 225 managed to rebound from last 2 days of losses to post a gain of 1.16% or up 160 pts. I am still sitting tight on all my options positions (Jun-Aug) although I expect more volatilty against the Augs calls. I am now looking to add new N225 Sep calls & puts for Sep's income set ups.

Jun 10 Japan Holiday Update

Today, we spent the day in Shizuoka city...shopping !!!! Just doing our little part to the Japanese economy since I "extract" yen from it monthly. There are actually some very good bargains (quality +price) in Shizuoka compared to home. We mainly bought clothes. I also indulged in a nice tea pot to pair with the Shizuoka green tea I will be bringing home. Asian stocks dropped sharply on Tuesday following mixed trading on Wall Street. The benchmark Nikkei shed 160.21 points to end at 14,021.17, the lowest close since May 28. During this holiday trip itself, I selectively took on additional but limited positions on the N225 Aug 17000 call (15 pts ) & the 9750 Puts (20 pts).

Jun 9 Japan Holiday Update

Today, we visit the Sunpu Yume Hiroba (Sunpu Deam Plaza) . In this facility, visitors can enjoy natural hot springs, food, play, culture in the reproduced streets of Edo period. We bath in the different outdoor baths overlooking the mountains in the background. We had a simple but delicious lunch of assorted rice balls & beer. After lunch, we took a stroll wearing traditional bath robes /sandles around the "street"..did some shopping & had some ice-cream. We bath again..this is the life. This place is really refreshiing...they even have resting room equipped with individual 1st class airplane seats where you can either read a book, watch TV or just sleep.

Meanwhile, Asian stocks fell sharply after oil prices surged to a record high of $139 a barrel and data suggested the world's largest economy is creeping perilously closer to stagflation. The U.S. unemployment rate posted its steepest one-month rise in 22 years, figures on Friday showed, increasing fears of a replay of the 1970s when a spike in inflation coincided with a period of stagnant economic growth. Japan's Nikkei stock average slid 2.1 percent on Monday. Next, I am looking at the Sep N225 Call & Put options to add to the positions this week or next week.

Today, we visit the Sunpu Yume Hiroba (Sunpu Deam Plaza) . In this facility, visitors can enjoy natural hot springs, food, play, culture in the reproduced streets of Edo period. We bath in the different bat...then bath again.... This is the life.

Jun 8 Options Writing Trades Update

It was quite a week(2 - 6) for the markets with volatility seen across-the-board. Stocks were volatile. Bonds were volatile. The dollar was volatile. Commodities and especially oil -were volatile. The end result for the stock market is that it gave back the prior week's gains as it struggled to overcome renewed angst about the financial sector and a stunning spike in oil prices that culminated in new record highs. The Nikkei 225 ended the week higher despite all but is still down 4% for the year. There is good support at the 14000 levels as institutional players are making selective buy of Japanese stocks which are now relatively cheap . The indices that I tracked:

Jun 6 Options Writing Trades Update

Today is a day of understanding more about Shizuoka. We visited the Sumpu castle(east gate).....a historical site originally constructed in 1586 and destroyed by fire in December of 1607, this castle, which was the residence of Tokugawa Ieyasu (the 1st shogun), was reconstructed in March of the following year. I awed in amazement of the human ingenuity to create & to control.
US market is trading sharply down as we speak due to job data & surge in oil prices & may set the tone for Asia markets next week. Tomorrow, I am attending my niece & nephew school's sports meet. We shall have a great day!

Jun 5 Options Writing Trades Update

This week & next, my family & I are vacationing in Japan- Shizuoka prefecture....famous for the best green tea in Japan. My family love Japan for its history, culture, scenary & food. As for me, I can fill my belly with Sashimi & sip cold sake to my heart's content. So far, the weather has been kind. Nice & cool. Tommorrow morning, we are going to the river to catch some fish.

Jun 3 Options Writing Trades Update

Credit worries rattle world markets again with negative news against several high profile financial company. As expected, Asian market is a sea of red Tuesday following overnight losses on Wall Street. The Japan's Nikkei stock average dropped 1.6 percent. The dollar fell as much as around 0.4 percent to 103.98 yen, with the Japanese currency adding to sharp gains the previous day making exporters more costly.

Jun 2 Options Writing Trades Update

The Nikkei gained over 100 points to 14,440.14, its highest close since Jan 9. The Aug's call positions are trading negatively against me nearing their stop- loss triggers.