Posts Tagged ‘EXPE’

Closing 2 trades and a look back on the two remaining live ones

By: ispeculatornew | Date posted: 02.18.2010 (5:00 am)

It is now time to close 2 trades, one that went badly and the other which went better than I could have hoped. I will start with the good one!

LONG NFLX/SHORT NILE

Blue Nile is a difficult stock to short because it is very volatile and trades at very high P/E’s compared to its peers (in my opinion). While I like the company and think it does have a very good future, its high ratios continue to shock me. I had gone short against Netflix, who announced very good earnings as well as a few more partnerships. This was the best example of a long/short trade that went for the best as Netflix gained 26.61% while Blue Nile lost 17.51% of its value for a total gain of 63.04%***

***As explained in the past, when you do long/short trades, you actually put up margin only, no capital and so returns are divided by .7 to account for the fact that 10,000$ portfolio would not have 10,000$ short and 10,000$ long but rather 14,000$ long and 14,000$ short.


LONG GOOG/SHORT BIDU

I knew that shorting Baidu was a risky proposition but simply believed it was also an overvalued stock at this point. I did turn out to be wrong. Google did remain steady (-2.19%) but Baidu gained (-15,82%) enough to make me a loser on this trade, a loss of 24.79%.


The other two trades that I currently have are both going fairly well so far:

LONG PCLN/SHORT EXPE +9,64%

LONG AAPL/SHORT AMZN +8,67%

So far this year, it gives me an average return per trade of 14.14%, well above expectations. Remember that I was quite happy last year with the 2,53% return I had given the short time the average trade lasts. I should have a new trade next Monday, hoping that they can continue to do well!