I've renewed my bearish strategy against XLF, and this article on European sentiment helps to explain why I think it's a good move:
Eurobanks are hurting as much as their U.S. counterparts. U.S. markets are closed today for the Dr. Martin Luther King Jr. federal holiday, so the short trade I've set on XLF calls will execute tomorrow. The problem now is that bearish sentiment has taken a lot of the premium out of XLF's call options. This strategy probably won't generate as much of a payoff for me this year as it did in 2008. Hey, I'll take what I can get.
Nota bene: Anthony J. Alfidi holds uncovered call options on XLF in the expectation that the price of this ETF will not rise more than 15% within the next month or two.
European stock markets fell Monday with banks in free fall as investors fretted over a second British government bailout of the sector in three months and some predicted that cash-strapped Royal Bank of Scotland Group PLC would end up fully nationalized.
Eurobanks are hurting as much as their U.S. counterparts. U.S. markets are closed today for the Dr. Martin Luther King Jr. federal holiday, so the short trade I've set on XLF calls will execute tomorrow. The problem now is that bearish sentiment has taken a lot of the premium out of XLF's call options. This strategy probably won't generate as much of a payoff for me this year as it did in 2008. Hey, I'll take what I can get.
Nota bene: Anthony J. Alfidi holds uncovered call options on XLF in the expectation that the price of this ETF will not rise more than 15% within the next month or two.
