What I traded: the SNDQ / SNDU sequence

I entered August holding the Micron–SanDisk FCN and SNDQ, an inverse SanDisk product used for protection. The FCN’s valuation recovered and it paid a coupon during the month. The more difficult part was the sequence of decisions around its hedge.

  • 4–5 August: I added to SNDQ and then sold the entire SNDQ position. The FCN itself remained in place.
  • 6–13 August: I repeatedly bought and sold SNDQ, rather than maintaining one stable period of protection.
  • 12–27 August: I sold an SNDQ put and later bought it back at a higher option price, realising a loss. This added an option trade on the inverse product to the original hedging decisions.
  • 18–21 August: I traded SNDQ repeatedly and also bought SNDU, a bullish SanDisk product, during the reversals. My exposure switched between bearish protection and a bullish rebound trade.
  • Month-end: I bought SNDQ again and retained the position. The month did not end with every hedge closed.

What else I traded

  • Zijin Mining: I traded call options and retained a short put at month-end. Pop Mart: an existing short put expired worthless, and I also traded a call spread. Laopu Gold: I bought back a short put and ended the month with puts at the same strike but different expiries.
  • Ping An: I used short calls alongside the existing shares. I closed the existing 07709 leveraged SK hynix ETF position. In GLD, I bought, stopped out, and established a new position near month-end.
  • NVDQ: I closed an initial trade at a profit, while a later position remained open. I also bought back a CRCL short put; a COHR short put remained open at month-end.
Decide what the position is for before deciding what to buy.

My reflections · edited from the review

SNDQ began as insurance against the FCN’s downside, but I gradually asked the insurance to earn its own return. I removed protection when it lost money, switched to a bullish trade during a rebound, then returned to a bearish position. Each decision could sound reasonable on its own; together, they no longer served one stable purpose.

Closing SNDQ did not close the FCN’s risk. The investment’s risk lasted longer than the periods in which I kept protection, including gaps around the earnings event. I could accept a loss and exit, but often re-entered too quickly. Looking at the full sequence made the repeated costs and changes of purpose much clearer.

The FCN’s valuation recovery and coupon helped the month, while related hedges and reversals gave back much of that benefit. Finishing with a positive return did not prove the process had improved. I needed to judge the investment, the protection and their combined outcome, rather than expect both sides to make money at the same time.

My AI research partner’s suggestions

These are the review’s proposed September process rules. They are a plan to work on, not a record of actions completed in August.

  • Before hedging, write down what is protected, how long protection is needed, the trigger conditions and the acceptable cost. Review the hedge together with the investment over that same period.
  • Keep risk-management decisions separate from return-seeking trades. Switching from SNDQ to SNDU needs a newly documented investment reason; discomfort with the previous loss is not enough.
  • Introduce a cooling-off period after a stop-loss and limit repeated entries in the same event. Review the whole sequence, not just whether the latest trade won.
  • Reassess whether a daily-reset leveraged or inverse product still matches a note held over several months. Check option obligations, liquidity and the event calendar together before changing the hedge.

The reported result

The estimated return was +1.55% using approximate Modified Dietz and the timing of external cash flows. It includes the month’s valuation changes as well as realised trading results. It is unaudited and is not an official daily time-weighted return.