Trading the market
So I decide I want to buy some AFLAC/AFL during this, its post-breakout pullback. My portfolio has sufficient cash, but is maxed out with the total number of portfolio holdings I allow. This is good discipline -- to limit my portfolio to only the best opportunities. Thus, a new position must trump an exisiting position.
What to sell, what to sell? Easy answer that -- Apple/AAPL. It looks likely to endure a "trader's break" of ~$5-15/share. In the swap, I sell AAPL for $56.74 and purchase AFL for $46.75, thus reducing net exposure to the market by $10 and selling one trending and acting toppy (AAPL, near term) for one just breaking out (AFL). Of course, I could re-purchase AAPL, especially if the shares do suffer that trader's break.
What to sell, what to sell? Easy answer that -- Apple/AAPL. It looks likely to endure a "trader's break" of ~$5-15/share. In the swap, I sell AAPL for $56.74 and purchase AFL for $46.75, thus reducing net exposure to the market by $10 and selling one trending and acting toppy (AAPL, near term) for one just breaking out (AFL). Of course, I could re-purchase AAPL, especially if the shares do suffer that trader's break.
posted by David M Gordon | 10:23 AM
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