ASX Stock Pairs Trade Journal

[VSntchr]

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

I did, no bueno!

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!

The market did tank, and tank all day...I picked WOW as a bit of a second day play to try and find some downward momentum...pretty bad choice! I should have removed the short bias and acknowledged the support at $26.30 then maybe I could have made some money long.

 

[skc]

Crazy period for pairs this month.

After getting hit on 2 profit downgrades (QUB and NEC), I scored a trifecta today.

Had a 3/4 size short on SEK
SKE/PRG going into trading halt
and a nice ANN downgrade selloff

Of course, I took profits too early as usual... but still nice to have the chips fall your way for a change.

Financial sector is smoking me this week...AMP/IFL

You still in this?

 

[SilverRanger]

Crazy period for pairs this month.

After getting hit on 2 profit downgrades (QUB and NEC), I scored a trifecta today.

Had a 3/4 size short on SEK
SKE/PRG going into trading halt
and a nice ANN downgrade selloff

Of course, I took profits too early as usual... but still nice to have the chips fall your way for a change.



You still in this?

Glad to hear, I only managed a double, happen to short full size SEK and IFL. Looks like IFL is in trading halt now, will it drop further? I don't know, I'm out

 

[VSntchr]

Crazy period for pairs this month.

After getting hit on 2 profit downgrades (QUB and NEC), I scored a trifecta today.

Had a 3/4 size short on SEK
SKE/PRG going into trading halt
and a nice ANN downgrade selloff

Of course, I took profits too early as usual... but still nice to have the chips fall your way for a change.

NICE! I am short SEK from open, will see how we go there.

Good to see the mean reversion of events working against you is occurring. I bet you didn't expect it to level up so quickly!

You still in this?

Nope Got out for a small loss at time stop a while ago. Tried to trade IFL directionally today, but didn't pull the trigger..then it ran off down without me so left it alone.

 

[skc]

Glad to hear, I only managed a double, happen to short full size SEK and IFL. Looks like IFL is in trading halt now, will it drop further? I don't know, I'm out

Nice. I almost had a IFL long with my pairs so sort of dodged one here.

I am long IFL now... entry not to different to current price.

I read the long expose' last night and thought they'd be hit 3-5%. They lost some $600m in market cap, but knowing ASIC they'd probably be fined $2m at the end of a 3 year investigation. A 20% fall seems like an overkill.

It's only a directional trade however... will stop reasonably tight.

One thing I am unsure of, however, is whether the reputational damage affect some of their funds in terms of insto flows.

 

[VSntchr]

Glad to hear, I only managed a double, happen to short full size SEK and IFL. Looks like IFL is in trading halt now, will it drop further? I don't know, I'm out

Good work mate! Full size on those two would be a nice month - even put you in place for a nice quarter!

 

[SilverRanger]

Nice. I am long IFL now... entry not to different to current price.

I read the long expose' last night and thought they'd be hit 3-5%. They lost some $600m in market cap, but knowing ASIC they'd probably be fined $2m at the end of a 3 year investigation. A 20% fall seems like an overkill.

It's only a directional trade however... will stop reasonably tight.

One thing I am unsure of, however, is whether the reputational damage affect some of their funds in terms of insto flows.

I almost had a IFL long with my pairs so sort of dodged one here.

Yes I agree it's overdone, but I wasn't willing to catching a falling knife and there was nothing from IFL at the time. In hindsight should have gone long on the back of the announcement.

 

[skc]

Nice. I almost had a IFL long with my pairs so sort of dodged one here.

I am long IFL now... entry not to different to current price.

I read the long expose' last night and thought they'd be hit 3-5%. They lost some $600m in market cap, but knowing ASIC they'd probably be fined $2m at the end of a 3 year investigation. A 20% fall seems like an overkill.

It's only a directional trade however... will stop reasonably tight.

One thing I am unsure of, however, is whether the reputational damage affect some of their funds in terms of insto flows.

Pretty much all out now. What a range for the day! Didn't do nearly as well considering the range on offer.

 

[VSntchr]

Pretty much all out now. What a range for the day! Didn't do nearly as well considering the range on offer.

Another day, another wild range. FLT this time! Managed to trade it both ways for a profit ...although not smiling too much as I hold this one in the SMSF

Back on pairs, VOC is to pay a special div to those on the register on the 29th June - so would I be correct in saying that you had to exit today to avoid paying this on shorts?
This one has been very tricky to trade without much chance to jump in and out - alot harder than FDC/NVN was. Both can go very thin, especially AMM, and because A and V open at different times trading the open is not safe. Looks like holding through to implementation will be the easy way out here!

Some big and quick moves around this week, this has allowed me to exit a few pairs for nice targets...but accruing a few stagnant trades at the moment.
I have noticed I have been leaving a little too much on the table at the moment too - although this comes part and parcel with a more volatile environment, I think I do need to give trades going my way a little extra time. I will monitor the win-rate and ratio of avg win to avg MFE to see how this works.

 

[SilverRanger]

Back on pairs, VOC is to pay a special div to those on the register on the 29th June - so would I be correct in saying that you had to exit today to avoid paying this on shorts?
This one has been very tricky to trade without much chance to jump in and out - alot harder than FDC/NVN was. Both can go very thin, especially AMM, and because A and V open at different times trading the open is not safe. Looks like holding through to implementation will be the easy way out here!

Good pick up there, I literally forgot about it. But if the record date is 29th June then the ex-div date should be 25th, so hopefully I can still get out if I choose to. But then the pair hasn't fully converge yet (there's still 2.2% of fat out there!), so taking a 0.9% dividend for the full convergence isn't too bad after all.

And yes this pair is definitely much harder to trade than FDC/NVN, let's hope SKE/PRG will be easier

 

[VSntchr]

let's hope SKE/PRG will be easier

Yes, looking forward to seeing the terms on that one.
You trading the IIN/TPM play?

 

[skc]

Yes, looking forward to seeing the terms on that one.
You trading the IIN/TPM play?

I have a small position on this... probably some lingering issue from ACCC, but it doesn't apepar to be a show stopper.

Another day, another wild range. FLT this time! Managed to trade it both ways for a profit ...although not smiling too much as I hold this one in the SMSF

Nice work. I like how it basically ran $4 down so smoothly. I didn't trade the up leg however.

 

[SilverRanger]

I have a small position on this... probably some lingering issue from ACCC, but it doesn't apepar to be a show stopper.



Nice work. I like how it basically ran $4 down so smoothly. I didn't trade the up leg however.

IIN/TPM or TPM/IIN? (long leg first)

IIN is trading at a premium to both $9.55 and the script offer as far as I know.

 

[skc]

IIN/TPM or TPM/IIN? (long leg first)

IIN is trading at a premium to both $9.55 and the script offer as far as I know.

IIN/TPM. The script deal is 0.969 TPM per IIN, plus 75c dividend. So that's $9.82 per IIN at last TPM close of $9.36.
There's also ~26c franking credits.

So IIN about 1.4% under the offer without considering the franking credit.

Or am I delusional? (Entirely possible as I have averaged 5 hr broken sleep in the last 2 weeks)

 

[SilverRanger]

IIN/TPM. The script deal is 0.969 TPM per IIN, plus 75c dividend. So that's $9.82 per IIN at last TPM close of $9.36.
There's also ~26c franking credits.

So IIN about 1.4% under the offer without considering the franking credit.

Or am I delusional? (Entirely possible as I have averaged 5 hr broken sleep in the last 2 weeks)

Nope I missed the dividend part, thought it only applies to the cash offer. Hope that didn't break your sleep more =)
But looking at where TPM is trading at, it might be safer to use 0.178 share + $7.18 for the implied price

 

[VSntchr]

0.55 PRG shares and 25c cash (reduced by any SKE divs). More generous than I was expecting.
This should certainly be accepted by SKE holders.

Nice trade available on the open...PRG hasn't fallen at all, actually it has risen. Given the non-certainty of the deal and the time premium SKE is trading at probably a fair level at 1.71.
If the deal falls over it would be SKE falling too 110-130 level, so some sizeable downside here to keep in mind.

 

[skc]

0.55 PRG shares and 25c cash (reduced by any SKE divs). More generous than I was expecting.
This should certainly be accepted by SKE holders.

Nice trade available on the open...PRG hasn't fallen at all, actually it has risen. Given the non-certainty of the deal and the time premium SKE is trading at probably a fair level at 1.71.
If the deal falls over it would be SKE falling too 110-130 level, so some sizeable downside here to keep in mind.

It's a done deal. It has SKE board apporval already. The only thing that can derail it is if SKE comes out with a big profit downgrade (entirely possible).

With expected completion around mid Oct (<4 months away)... a <2% gap should be about right. The franking is worth another 10c as well.

 

[VSntchr]

It's a done deal. It has SKE board apporval already. The only thing that can derail it is if SKE comes out with a big profit downgrade (entirely possible).

With expected completion around mid Oct (<4 months away)... a <2% gap should be about right. The franking is worth another 10c as well.

Am I correct in thinking the franking will depend on the level of actual dividends that are declared to replace the 25c cash component?
Also PRG ex-div next Wed for 11.5c + franking.

 

[SilverRanger]

Looks like some arb opportunity for AMM/VOC still at market close!

 

[VSntchr]

Looks like some arb opportunity for AMM/VOC still at market close!

Yeah, I tried to get out around lunch time but it was too hard. By the time my AMM leg was about to get filled VOC would move...ended up just holding on. Will cost a bit more in financing, but save on the brokerage.