Saturday, January 30, 2010

More Popcorn

Recall last weekend in - Eating Popcorn - I discussed trader Sol from XTrends.

He came into this past Monday long *1600* S&P 500 emini's - a position that was worth $80,000 per point.

Here's how the index performed these past five days:

And here are his reported trades for the week:

Click image to enlarge if needed.

So it looks like Sol was able to scalp the long he carried over the weekend, making ten point on half of his position and breaking even on the other half - for a net profit of $400,000 on Monday.

Then it looks like he gave it back in the next two days - losing on two more attempts at going long, losing on three attempts to short the S&P, and he lost at bit, 51k, trying to whack gold.

His luck then turned, winning with a market short and a gold short, and then later, on Thur-Friday with a big scalp on the long side. Not counting his last few trades, the numbers show almost a $2 million profit for the week. Not bad, right?

Well, maybe it's not as good as it seems.

You see, a 1,600 long futures position, what Sol came into the week with, represents:

1,600 x 50 x 1092 = $87,360,00

That's right, it's an 87 million dollar long position.

Sure, I undertand that margin is 10% for futures, and therefore Sol's account might only have $8.7 million in it.

In that case, yeah, a $2 million weekly profit off a base account of 8-10 million would indeed represent some spectacular returns.

But it would also represent substantial risk - something no one has to explain to me, a veteran profit-eraser!

I highly doubt that Sol only as $10 million in his account. I'd wager that he has at least $20 million; and that it's not all his. (Though I could be wrong, of course.) I just think some numerical perspective is warranted before anyone anoints this guy a *great trader* - because turning $80 million into $82 million, even in a week, don't mean squat!

After giving back 200k of his profits on Friday, Sol is coming in, what seems to be, seriously long yet again this Monday. He held *overnights* in the S&P 500, the NASDAQ-100, and the RUSSELL-2,000 representing, yet again:

56,726,250 + 10,409,000 + 21,213,500 = $88,348,750

Now don't get me wrong, I respect anyone who's got the stones to publicize their trades - even if on a somewhat delayed basis.

One thing's for sure, Sol's got more balls (and brains?) than I do. I could never bring myself to come in that long in THIS MARKET.

Good luck to him. May he get out of his long before the market moves *my way*.

1 comment:

Funny Circus Bears said...

At the very least, the guys got stones.