ASX Stock Pairs Trade Journal

[skyQuake]

No problems here... using desktop version though.

Desktop too, getting random intervals of unresponsiveness. Thought it was related to the outage yest, IRESS is looking into it...

 

[SilverRanger]

Desktop too, getting random intervals of unresponsiveness. Thought it was related to the outage yest, IRESS is looking into it...

Got the same issue here, but seems working as of now

 

[VSntchr]

Announcement for SCP this morning that they are conducting a "material" capital raising for 3 neighbourhood shopping centres. Looks like the trend of capital raising continues..

I'm short a full position, would like to think a material raising will be conducted at somewhat of a discount and create a price drag...but when it's for transformational purposes sometimes the price can run. We'l have to see tomorrow.

 

[VSntchr]

Announcement for SCP this morning that they are conducting a "material" capital raising for 3 neighbourhood shopping centres. Looks like the trend of capital raising continues..

I'm short a full position, would like to think a material raising will be conducted at somewhat of a discount and create a price drag...but when it's for transformational purposes sometimes the price can run. We'l have to see tomorrow.

EDIT - more news out, just a couple of centres in Tasmania and $50m being raised Certainly not as "material" as I expected.
Slight earnings upgrade may somewhat offset any pull towards the $2.02 issue price.

 

[SilverRanger]

EDIT - more news out, just a couple of centres in Tasmania and $50m being raised Certainly not as "material" as I expected.
Slight earnings upgrade may somewhat offset any pull towards the $2.02 issue price.

They are certainly more active in taking advantage of their share price strength, this is their second raising this year (and a bit too generous to give a 5% discount without the retail investors). I had a double shot of short on it but closed half yesterday, oh well...

P.S Almost had a heart attack after seeing MND going on a trading halt, lucky it wasn't a takeover

 

[skc]

P.S Almost had a heart attack after seeing MND going on a trading halt, lucky it wasn't a takeover

You short I guess? Nice.

EDIT - more news out, just a couple of centres in Tasmania and $50m being raised Certainly not as "material" as I expected.
Slight earnings upgrade may somewhat offset any pull towards the $2.02 issue price.

I think the FTSE index inclusion (mentioned in the piece) probably explained most of the buying. Stocks tend to outperform prior to inclusion then underperform shortly after the actual inclusion date.

 

[SilverRanger]

You short I guess? Nice.

Yes I'm on MRM/MND atm, but as usual a modest half size position. The timing of the trading halt was kind of nice, as it just missed out the rally today.

There's not much info so far, but if I have to guess then my money is on its contract with JKC’s Ichthys project, which is apparently 30% complete. Not long ago UGL had some delays and cost blowout issues there and MND is in it as well.

 

[VSntchr]

Taking another punt at AMM/VOC today after reading about AMM's substantial holder statements from BTT and WBC. Some they think the deal will go through, maybe it will

Happy day for you my friend!

 

[SilverRanger]

Happy day for you my friend!

Added another dose at market open today, still 2.5% to be milked at the time

 

[VSntchr]

Added another dose at market open today, still 2.5% to be milked at the time

I re-initiated on that basis today too.

 

[skc]

Added another dose at market open today, still 2.5% to be milked at the time

I have no borrow!!

 

[VSntchr]

I have no borrow!!

Likewise for me now too, I went to double the position after starting it on the open and couldn't

 

[VSntchr]

One clear disadvantage of using CFD's for pairs trading is the limited ability to participate in corporate actions.

For example, the BTT capital raise at the moment. Without the ability to participate in the discounted offer price I lose the opportunity to arb back some of the loss that will occur on the pair. While some raisings are fine with CFD's, others are not possible to be a part of. Frustrating, but that's the opportunity cost of the leverage I guess!

 

[skc]

One clear disadvantage of using CFD's for pairs trading is the limited ability to participate in corporate actions.

For example, the BTT capital raise at the moment. Without the ability to participate in the discounted offer price I lose the opportunity to arb back some of the loss that will occur on the pair. While some raisings are fine with CFD's, others are not possible to be a part of. Frustrating, but that's the opportunity cost of the leverage I guess!

BTT is not raising capital. It's just a sell down by WBC. No new capital raised, no one is diluted, there's no TERP or anything like that. It's just free cheap shares that you miss out on, but I doubt you'd take too much of a hit on the pair.

It'd be a strong trading buy if it opens anywhere near the discount price.

 

[VSntchr]

BTT is not raising capital. It's just a sell down by WBC. No new capital raised, no one is diluted, there's no TERP or anything like that. It's just free cheap shares that you miss out on, but I doubt you'd take too much of a hit on the pair.

It'd be a strong trading buy if it opens anywhere near the discount price.

Yes. Poor choice of terminology from me, but the 'missing out' factor remains
Ended up cutting the pair and copped a 4.7% loss as it was already slightly in the red before today.

I don't want to hang around in hopes of BTT regaining the lost ground after seeing what has happened with CTX after the Chevron sell-down. Obviously alot of different factors at play, but happy to sit out and see how it unfolds.

 

[SilverRanger]

Yes. Poor choice of terminology from me, but the 'missing out' factor remains
Ended up cutting the pair and copped a 4.7% loss as it was already slightly in the red before today.

I don't want to hang around in hopes of BTT regaining the lost ground after seeing what has happened with CTX after the Chevron sell-down. Obviously alot of different factors at play, but happy to sit out and see how it unfolds.

Took a long in BTT @ 8.35, as I think the market reacted irrationally to this sell down, which should be a good news (and more free floats to trade!)

And apparently WBC shareholders can get a slice of the cake as well, bonus

 

[skc]

Yes. Poor choice of terminology from me, but the 'missing out' factor remains
Ended up cutting the pair and copped a 4.7% loss as it was already slightly in the red before today.

I don't want to hang around in hopes of BTT regaining the lost ground after seeing what has happened with CTX after the Chevron sell-down. Obviously alot of different factors at play, but happy to sit out and see how it unfolds.

Fair enough. CTX has been way weak since (although a good bounce today).

All the other WM's are pretty weak yesterday and today. PPT and MFG down 4% mid day. So hopefully your short leg is doing well.

 

[skyQuake]

Fair enough. CTX has been way weak since (although a good bounce today).

All the other WM's are pretty weak yesterday and today. PPT and MFG down 4% mid day. So hopefully your short leg is doing well.

But Chevon's selldown left buyers underwater/flat for nearly a month.

Whereas BTT is positive from the get go. Couple of algo held the bids and absorbed all weak hands. So I think this ones a slightly different situation.

Disc: hold BTT

 

[VSntchr]

But Chevon's selldown left buyers underwater/flat for nearly a month.

Whereas BTT is positive from the get go. Couple of algo held the bids and absorbed all weak hands. So I think this ones a slightly different situation.

Disc: hold BTT

Good point skyQ. Guess I exited a bit hastily here. Hard to know when to be strict with the "exit on news" rule, and when to relax it. The CTX experience clouded my judgement here and I didn't recognise the differences in how participants were feeling in their positions. Guess I was the weak hand today

All good, not a massive loss for me - but it does dampen my chances of finishing FY15 with the pairs in equity high.
Need approx 3.3% for the month and currently sitting on 0.7% (open + closed). I have PMV/HVN which is taking a bit of a hammering (HVN seems to be not a good stock for me / is probably a bit too housing related to be paired with PMV), but other than that the open portfolio is quite young so I still have a good chance!

 

[skc]

Good point skyQ. Guess I exited a bit hastily here. Hard to know when to be strict with the "exit on news" rule, and when to relax it. The CTX experience clouded my judgement here and I didn't recognise the differences in how participants were feeling in their positions. Guess I was the weak hand today

All good, not a massive loss for me - but it does dampen my chances of finishing FY15 with the pairs in equity high.
Need approx 3.3% for the month and currently sitting on 0.7% (open + closed). I have PMV/HVN which is taking a bit of a hammering (HVN seems to be not a good stock for me / is probably a bit too housing related to be paired with PMV), but other than that the open portfolio is quite young so I still have a good chance!

You should contact your CFD guys to see if you can participate in the BTT sell down

But Chevon's selldown left buyers underwater/flat for nearly a month.

Whereas BTT is positive from the get go. Couple of algo held the bids and absorbed all weak hands. So I think this ones a slightly different situation.

Disc: hold BTT

Traded long today but barely made anything. The market was hammered and hammered some more. Very hard to hold the long in the face of the that. I was a pretty weak hand too!