Take Second Half of FXI Profits

Also, Reinstate “Sniper” Tactic

By Bryan Bottarelli
Wednesday, February 06, 2008 9:34 AM EST
Wed, 6 Feb 2008 14:34:00 GMT

Dear Bottarelli Research Member,

I’d like to once again congratulate you for sticking with your DIA puts. Last week, it appeared like buying puts would result in a losing trade, but savvy traders like us knew better. And yesterday, we got our payoff as the Dow dropped 370 points. Great trading my friends!

Looking ahead, I’d like to outline our tactical strategy so that everyone is on the same page. When it comes to our LEH March 55 Puts (LES OK) and our SII March 60 calls (SIK CL), I’d like to definitely continue using our “sniper” trading strategy and lock in profits the moment you see a 15% to 20% gain above your original entry price. Perhaps I was unclear about communicating this point yesterday, but the reason I chose to eliminate our “sniper” tactics on the FXI and DIA plays was that I had a feeling we were in for a big market drop — and I wanted to maximize our potential returns. Now that we’ve witnessed this drop, let’s reinstate the “sniper” tactic on all of our forthcoming plays.

Let’s also go ahead and lock in profits on the second half of our FXI February 149 Puts (FFP NS).While stock markets in South Korea, China, Taiwan and Vietnam are closed Wednesday through Friday for Lunar New Year holidays, markets in Hong Kong and Tokyo plunged overnight due to yesterday’s big sell off. The Hang Seng lost 1,339.24 points, which was a 5.4% drop. And on the same note, the Hang Seng China Enterprises Index slumped 6.9%, so let’s avoid any upside bounce and close out our FXI put position for good.

PLAY: Sell the second half of your FXI February 149 Puts (FFP NS) at market, good for the day.

More to follow. Until then…

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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