This is the 2nd time I remember recently I had only one scenario to deal with a deeply underwater situation. The scenario is in favor of my direction. Last time was the expiration of wheat in May. I didn't get out of all of my expiring puts and got assigned. To make the matter even worse I didn't know I was assigned 2 new long positions and I didn't even check after the assignment. It was like running a business without checking bank balance. I planned to add one more contract to wheat 625 before USDA report and scale it out during the volatile report release swings. I expected it a two way swing like most time. I didn't have a plan for any other scenarios. I was so single minded. I could have bought a put to hedge it. But a different way of hedging didn't even crossed my mind before the report. Once the report came out it was a one way down the hill. My $25 entry became $35 in the water. I wonder why I didn't think it differently. I have learned the lesson before. I have about 5 days to unwind these positions. I will sell calls on a pop and buy puts to hedge. I will started to roll over these positions to August and further out. In the meantime control my risk and size.
One thing worked today is that I was able to exit out my ES bear calls of this week unscratched. It was luck and the nature of ES saved me.
From now on I must have at least two hypotheses for every rescue plan. I need to clear define each scenario and my action when and if it happens.
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