Weekly Market Assessment
The halt heard 'round the World! On Thursday, all NASDAQ listed stocks where halted for 3 hours, meaning you could not trade them! The NASDAQ is the second-largest stock market comparing to official stock exchanges by market capitalization in the world, after the New York Stock Exchange. A problem affecting quote dissemination starting at ~12:15 ET froze trading in all NASDAQ securities. Was the exchanged hacked, a software glitch, high frequency trading, fat finger or just another Flash Crash? On Tuesday Goldman Sachs also had a "glitch' with its internal computer system which caused the firm to issue incorrect equity options orders and is estimated to lose ~$100 million because of it. What is scary is not only what happened but the duration of this event. There are thousands of scenarios that could have manifested had this occurred on any other day such as an option expiration, Fed meeting, jobs report or any other significant market moving event. Traders would not be able to hedge their positions or even enter or exit a trade. In the words of the former SEC Chairman Harvey Pitt, "this is an unprecedented event." We have now experienced everything from the Flash Crash, Knight Capital glitch, the Fake Tweet, to now what is being called the "Flash Freeze". How many more of these "glitches" will transpire and to what extent will they affect investors? We cant seem to live without, however at the epicenter to all these events lies the single culprit, technology.
From the Trading Floor to the Option Pit: A quick look at what's on the trading desk
E-Mini S&P 500 futures- We received the FOMC meeting minutes on Wednesday and the market sold off and then recovered only to sell off again. Enter volatility! Bought mostly option "PUTS" this week and held through all the pain and then gain to end the week with an E-mini option gain of 12%
Cisco (CSCO)- Cisco Systems, Inc. designs, manufactures, and sells Internet protocol (IP) based networking and other products related to the communications and information technology industries. Took a 26% hit on this option trade as it never recover to above $24.50. Another example of how using options limits loss without using a large amount of capital to make a trade.
Amazon (AMZN)- Was able to exit this trade with a small option gain of 18%, after AMZN rallied back 289.75. I held weekly $290 "CALLS". The 50 day moving average seems to have created a resistance level and I will look to renter this position if it breaks above this average
Halcon Resources (HK) Halcón Resources Corporation, an independent energy company, engages in the acquisition, production, exploration, and development of onshore oil and natural gas. Operates in most of the major oil and gas shale plays in the U.S. Been following this company for awhile, has an experienced management team of building and selling companies in this field. Recently, insiders have been buying up shares and this has given me more confidence to finally pull the trigger and buy shares. My entry point is at $4.75