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Real Vision: Finance & Investing

Post-Trade Analysis: Long Position SONY/Short XLK

Real Vision: Finance & Investing

Real Vision

Investing, Business News, News, Business

4.11.1K Ratings

🗓️ 6 February 2022

⏱️ 15 minutes

🧾️ Download transcript

Summary

Weston Nakamura closes his long Sony Corp. (NYSE: SONY)/short Technology Select SPDR Fund (NYSE: XLK) market-neutral pair trade, as SONY shares rallied following an intraday trading halt on news of its acquisition of Bungie for $3.6 billion Weston shares his thought process and overall assessment. Though it was a net-profitable trade in an environment of elevated global equity volatility, Weston’s frank self-evaluation is that this was a flawed structure. He categorizes this win as “right for the wrong reasons.” In other words, he got lucky. Weston expands on the importance of applying the framework of being “right/wrong, for the right/wrong reason” for all traders and investors. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Transcript

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0:00.0

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0:30.2

Hey everyone, thanks for tuning in to the weekend edition of the Real Vision Daily Briefing.

0:34.9

Here's Weston Nakamura to break down everything you need to know.

0:40.6

Hey everyone, Weston Nakamura from Real Vision in Tokyo. Okay, flash update.

0:45.2

Bad news on my long Sony and short XLK market neutral pair trade that I have on.

0:52.4

So Sony was halted earlier for trading on news of its takeover of Bungie for $3.6 billion.

1:01.5

And when shares resumed for trading, Sony, my long, popped nearly 6% or 7% higher on the day.

1:10.8

And I immediately closed out the trade on both sides. So I sold my long Sony,

1:16.7

I covered my short XLK and I had about a net 2% gain, actually 1.7% gain on the trade.

1:26.8

And yes, I'm aware that I said bad news because it is bad news.

1:30.7

And furthermore, I'd even say that this was a trading mistake on my part.

1:35.0

And therefore, you know, another sort of fantastic opportunity to share what it is that I've done.

1:41.3

So first of all, why is taking profit on a 7% intranay rally on my long bad news or in the mess up?

1:49.1

Why did I exit the trade, right? It's very simple. It's because I'm right for the wrong reasons.

1:55.9

So previously, you might have, you know, talked about being right for the right reasons or

2:00.0

right for the wrong reasons as well as being wrong for the right reasons and wrong for the wrong

...

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