It was expected indices to face some resistance after SPX and RUT closed at Fib 61.8 and 50% entrancement from the Weekly break down charts. ES/SPX and RUT had a small range day. They tried to push up for most of today, RUT even went to positive for a while. But they closed lower. It looks like the market may try to have another leg down.
I came in with deleveraging in mind. I sold couple bear call spreads in both ET accounts. I typed in a wrong date to sell in IB and didn't notice it until near closing. The only thing I did in IB was closed Sept 30 1050 naked put with 65% profit. My losing side is heavier on SPX. I may have to take bigger losses to close some puts since I didn't get much deleveraging done today. ES slide below last night low this evening already. Let's see what Asia and Europe will bring to the table. I have only $28K margin left after today's monthly expiration.
Monday, August 31, 2015
Saturday, August 29, 2015
A week Of Blood Bath 8-29-15
You never know when the beast will strike! A week before the passing week we were in this calm and boring range bound. The release of FOMC meeting minute indicated no decision to raise the rate in Sept. Market didn't react too badly. Then came to a small sell off on Thursday pushing ES to the lower end of the range. I was a little concerned the market may break down to the next balance area. Friday's 1+% drop and margin calls in IB had me worried and defenseless in buying power and available margin. I was worried a lot over the weekend and looking for ways to release margin. I reviewed my exit plan. I didn't come up with a lot more solutions other than closing more equity positions and rollover some credit spread positions.
The Black Monday actually started on Sunday night. Futures opened another gap down and continued to fall with Asian markets, especially the Chinese market. Then European market followed the suit. The rest is the history.
My damages were severe. I had to deal with margin issues on Monday and Tuesday. I tried to stay calm and rational as much as I could. I was facing the danger of losing my entire IB account. I am still not totally out of the wood yet.
My realized losses for all of my accounts were about $25K. There is about $85K total losses with other expiration periods and liquidation of S-5 account. Like they said the biggest draw down is in the future. I was just about to recover from last summer's $97K loss in grains. This time it damaged my equity positions. They were all liquidated. I am set back to 0% profit now after trading this strategy for 2.5 yrs. I will have to rethink of my career in trading after this crisis is over.
Lessons learned so far:
1. Not over leverage at any time. I was at 1.5 leverage ratio before the sell off. I have been monitoring my value at risk, VAR. I thought about to look up the meaning of leverage ratio. I kept to delay it thinking I had been OK so far. For that I paid a hefty price. When in doubt check it out immediately.
2. Get to know a strategy well enough before implement it. I have been using credit spreads for several months. I knew the advantages of limited risk and lower margin requirement for which it saved me for being totally killed. But I didn't know it was very hard to rollover, not even for the same strike for longer DTE.
3. Risk control and exit plan must be very specific.
There are a lot more to list. I will do it later.
The Black Monday actually started on Sunday night. Futures opened another gap down and continued to fall with Asian markets, especially the Chinese market. Then European market followed the suit. The rest is the history.
My damages were severe. I had to deal with margin issues on Monday and Tuesday. I tried to stay calm and rational as much as I could. I was facing the danger of losing my entire IB account. I am still not totally out of the wood yet.
My realized losses for all of my accounts were about $25K. There is about $85K total losses with other expiration periods and liquidation of S-5 account. Like they said the biggest draw down is in the future. I was just about to recover from last summer's $97K loss in grains. This time it damaged my equity positions. They were all liquidated. I am set back to 0% profit now after trading this strategy for 2.5 yrs. I will have to rethink of my career in trading after this crisis is over.
Lessons learned so far:
1. Not over leverage at any time. I was at 1.5 leverage ratio before the sell off. I have been monitoring my value at risk, VAR. I thought about to look up the meaning of leverage ratio. I kept to delay it thinking I had been OK so far. For that I paid a hefty price. When in doubt check it out immediately.
2. Get to know a strategy well enough before implement it. I have been using credit spreads for several months. I knew the advantages of limited risk and lower margin requirement for which it saved me for being totally killed. But I didn't know it was very hard to rollover, not even for the same strike for longer DTE.
3. Risk control and exit plan must be very specific.
There are a lot more to list. I will do it later.
Thursday, August 27, 2015
Another 2+% Up Thrust 8-27-15
Indices stayed up overnight with Asian and European markets recovery. ES gaped up above Monday's high and closed Sunday's night's gap. ES closed inside of Monday's lower range. RUT also closed Monday's gap but closed below Monday's low. After an attempt of a steep push down to near yesterday's high after 2 pm bulls staged a strong offense to make a new high of the day. The next target for bulls is above 2000. It may be a tough fight. One indication is that VIX future is still at 24 range. It didn't even go below Tuesday's candle body despite the rally of the last two days.
I closed the rest of two RUT positions with some profits for a change today. I will work on three more of SPX puts expiring tomorrow. My highest position is 1930 and 50+ points away from today's closing. I will be OK unless we get another 50 points down day. With the high VX, it's possible but not likely. I will prepare my exit orders tomorrow morning. Then deal with Monday's month end closing as well.
I closed the rest of two RUT positions with some profits for a change today. I will work on three more of SPX puts expiring tomorrow. My highest position is 1930 and 50+ points away from today's closing. I will be OK unless we get another 50 points down day. With the high VX, it's possible but not likely. I will prepare my exit orders tomorrow morning. Then deal with Monday's month end closing as well.
Another Day of Battle 8-26-15
US indices moved up again overnight. It seems being the pattern of the last few days. Up at night and sold off by end of the day. My plan is still deleverage. I will do the following:
1. Roll over spreads with separate orders after unsuccessful of combo yesterday;
2. Look at closing the long leg first and then buy lower spreads to compensate the losses;
3. Buy short dated puts to increase margin or above the losing legs to make it a bear put;
First work on the positions of expiring this week in all 4 of my accounts.
It was another wild day for sure. I am so glad I asked the Yahoo group about rollover spreads last night. The responses gave me different thinking and approach to tackle my problem of rollover credit spreads. Thanks to the 3+% rally of the last hour today most of my positions expiring this week were closed except 2 which I will deal with them tomorrow.
The problem is not over yet. But I will deal with them with a calm and rational approach. A lots has been learned. The key is size and risk management especially before any entry.
1. Roll over spreads with separate orders after unsuccessful of combo yesterday;
2. Look at closing the long leg first and then buy lower spreads to compensate the losses;
3. Buy short dated puts to increase margin or above the losing legs to make it a bear put;
First work on the positions of expiring this week in all 4 of my accounts.
It was another wild day for sure. I am so glad I asked the Yahoo group about rollover spreads last night. The responses gave me different thinking and approach to tackle my problem of rollover credit spreads. Thanks to the 3+% rally of the last hour today most of my positions expiring this week were closed except 2 which I will deal with them tomorrow.
The problem is not over yet. But I will deal with them with a calm and rational approach. A lots has been learned. The key is size and risk management especially before any entry.
Tuesday, August 25, 2015
Killing Monday after Bloody Friday 8-24-15
It has been over 3% down again overnight. Asia and Europe are selling off and dragging the US indices down. It appears there will be about 3% gap down. Price quotes are wild and often unavailable. I am facing margin calls in IB account. I just got a call from Anthony that my S-5 account would be liquidated. It's going to cost me $25.6K.
A bloody day with margin close at S5 and margin calls at IB. A disastrous loss without getting a break. I will review it over the weekend.
A bloody day with margin close at S5 and margin calls at IB. A disastrous loss without getting a break. I will review it over the weekend.
A Dead Cat Bounce or Real Break Out? 8-25-15
A killing Monday is behind us for now which I am going to review it later or on my weekly review.
Last night China Central Bank cut its interest rate again alone with other rate related changes after Shanghai index closed down 7.6%. European market and US indices futures reacted with 4-3% surge. Before RTH, ES is parked on top of yesterday's high which is on the lower edge of CHVA. If we closed back in the CHVA of 1980 I think we would have a base to hold. We may see a retest of yesterday's low or even break below it then it's a dead cat bounce. My plan is to deleverage my account currently at 4.94. It was at 8 yesterday with VIX at highest level of near 50. I will roll down and out some positions near the money when and if possible. I may close some positions with little profit or loss to deleverage as well. Need to work on my Etrade and Fidelity accounts.
All of my corn and wheat positions were closed due to the margin call of Friday and Monday.
ES and RUT couldn't break yesterday's highs and finally gave up. The end of day reversal was pretty bad. Overnight lows were broken at the end. It was a largest reversal since 2008 according to data. I tried to roll over my put positions all day. Apparently it is difficult to roll spreads. I put on combo, extend spread, separate orders. None of them get filled. Volatility is still high despite the 3% run up overnight. VIX briefly went below 30 then closed above 40. Tomorrow may be another volatile day base on today's closing. I plan to do the following to reduce my margin and rollover my near money and ITM positions.
1. Buy out of money puts to increase my margin if I still have enough margin to buy them in IB.
2. Rollover credit spreads on this week's puts even at a loss;
3. Close positions to shore off margin calls.
The key is to survey and manage my risk to avoid a big disaster.
Last night China Central Bank cut its interest rate again alone with other rate related changes after Shanghai index closed down 7.6%. European market and US indices futures reacted with 4-3% surge. Before RTH, ES is parked on top of yesterday's high which is on the lower edge of CHVA. If we closed back in the CHVA of 1980 I think we would have a base to hold. We may see a retest of yesterday's low or even break below it then it's a dead cat bounce. My plan is to deleverage my account currently at 4.94. It was at 8 yesterday with VIX at highest level of near 50. I will roll down and out some positions near the money when and if possible. I may close some positions with little profit or loss to deleverage as well. Need to work on my Etrade and Fidelity accounts.
All of my corn and wheat positions were closed due to the margin call of Friday and Monday.
ES and RUT couldn't break yesterday's highs and finally gave up. The end of day reversal was pretty bad. Overnight lows were broken at the end. It was a largest reversal since 2008 according to data. I tried to roll over my put positions all day. Apparently it is difficult to roll spreads. I put on combo, extend spread, separate orders. None of them get filled. Volatility is still high despite the 3% run up overnight. VIX briefly went below 30 then closed above 40. Tomorrow may be another volatile day base on today's closing. I plan to do the following to reduce my margin and rollover my near money and ITM positions.
1. Buy out of money puts to increase my margin if I still have enough margin to buy them in IB.
2. Rollover credit spreads on this week's puts even at a loss;
3. Close positions to shore off margin calls.
The key is to survey and manage my risk to avoid a big disaster.
Saturday, August 22, 2015
Weekly Review 8-22-15
This week was differently change in price actions and sentiments. Using SPX/ES and RUT as examples there was a surge to the upside attempting to break into higher CHVA on Monday. On Wednesday after Fed Minutes released there were enough bulls to buy on the dip although sellers stopped the push up. The gap down on Thursday was not severe until the close at low of the day with at least 2% down across the board. VIX closed above 18. Friday opened with another gap down for no any major news. Panic was spread with chain reactions. SPX/ES ended with another 3% down and closed at low of the day again. They are parked on top of the next CHVA. VIX closed near 29. RUT fared better with only 1.3% down at cliff of its CHVA.
The week ended with 100% winners and $11,900 profit largely from previously closed wheat and corn positions. However, my portfolio value decreased over 20% from the last two days of heavy selling and margin increase. I encountered the worst margin draw down on Thursday and Friday. The worst often happens on worst timing. Like the pro said, the worst draw down is always in the future. On Friday several things happened to make it my worst trading day in indices.
1. I woke up late being lazy and undisciplined. I stayed up too late watching movies on my phone knowing my margin was kind of low. I didn't wake up early to prepare for the session. I let my guard down.
2. I run into network problems with comcast and IB login. On top of those I lost my S-5 platform setups and it came up blank. By the time I switched my internet connection and log in my trading plate forms IB started to liquidate my positions on margin calls. All of my wheat and most of corn naked positions were liquidated. It costed me about -$2500. Then came in 200 shares of HD, 700 shares of QCOM, 180 shares of JPM be sold by IB. My cash position changed from -$22K to + $54K. I didn't know my credit spread positions could increase my margin so much with VIX and Vega increase. In the afternoon I closed couple puts at loss to reduce my margin but didn't help much since the sell off continued. The margin figure changed almost every minute. I finally held above $5K at closing. It won't be enough for another down day on Monday. Luckily most of my positions are in spreads, otherwise I might have been in a much bigger hole or even crushed.
My task for this weekend is to figure out the best way to shore off my margin and avoid margin calls. I can roll down my positions but spread appears doesn't reduce much of margin. I may have to reduce my sizes while roll over to take some losses for now. I must come up a detailed plan before Sunday night. To survive on this sell off and be able to trade again is my priority. Do not a assume the sell off would stop here. It may have further to go and I must prepare for the worst scenarios.
The week ended with 100% winners and $11,900 profit largely from previously closed wheat and corn positions. However, my portfolio value decreased over 20% from the last two days of heavy selling and margin increase. I encountered the worst margin draw down on Thursday and Friday. The worst often happens on worst timing. Like the pro said, the worst draw down is always in the future. On Friday several things happened to make it my worst trading day in indices.
1. I woke up late being lazy and undisciplined. I stayed up too late watching movies on my phone knowing my margin was kind of low. I didn't wake up early to prepare for the session. I let my guard down.
2. I run into network problems with comcast and IB login. On top of those I lost my S-5 platform setups and it came up blank. By the time I switched my internet connection and log in my trading plate forms IB started to liquidate my positions on margin calls. All of my wheat and most of corn naked positions were liquidated. It costed me about -$2500. Then came in 200 shares of HD, 700 shares of QCOM, 180 shares of JPM be sold by IB. My cash position changed from -$22K to + $54K. I didn't know my credit spread positions could increase my margin so much with VIX and Vega increase. In the afternoon I closed couple puts at loss to reduce my margin but didn't help much since the sell off continued. The margin figure changed almost every minute. I finally held above $5K at closing. It won't be enough for another down day on Monday. Luckily most of my positions are in spreads, otherwise I might have been in a much bigger hole or even crushed.
My task for this weekend is to figure out the best way to shore off my margin and avoid margin calls. I can roll down my positions but spread appears doesn't reduce much of margin. I may have to reduce my sizes while roll over to take some losses for now. I must come up a detailed plan before Sunday night. To survive on this sell off and be able to trade again is my priority. Do not a assume the sell off would stop here. It may have further to go and I must prepare for the worst scenarios.
A Bloody Friday 8-21-15
One of my worst days in trading indices.
I woke up late when market was open in the morning;
Having internet connection problem or IB was jammed. I struggled for more than a hour while market was falling.
I got margin stops right after I logged on IB.
I struggled to try to reduce my positions but couldn't do it fast than the market drops. VIX increased so rapidly causing options prices multiples.
All of my wheat and corn put positions were forced to closed causing a loss of $2500.
In the end, my available margin is still under $10K when indices made new lows on closing.
I will review it tomorrow.
I woke up late when market was open in the morning;
Having internet connection problem or IB was jammed. I struggled for more than a hour while market was falling.
I got margin stops right after I logged on IB.
I struggled to try to reduce my positions but couldn't do it fast than the market drops. VIX increased so rapidly causing options prices multiples.
All of my wheat and corn put positions were forced to closed causing a loss of $2500.
In the end, my available margin is still under $10K when indices made new lows on closing.
I will review it tomorrow.
Thursday, August 20, 2015
Bear Is Back 8-20-15
My theses and plan:
US indices moved down overnight on weakness of globe markets and cruse oil. It's a gap down at open. ES, NQ are still within their current range while TF/RUT are below their weekly range. My targets for today are as follows.
ES: below 2053 O/N low, 2046 last seen of crime, 2038;
above, 2066 yesterday's low, 2075 gap fill;
RUT: below, 1189, last seen of crime, 1183, next CHVA;
Above, 1198, low of yesterday, 1203.7, gap fill;
I will be conservative on selling RUT puts, I will pick couple of 2nd puts in SPX. I would sell call on a meaningful pop.
Wheat held above $5.00 overnight and my last wheat puts for Aug was closed after open. I will see which way the market will pin on expiration tomorrow.
My execution:
Wow, what a sell off. All of the major US indices were sliced 2% or more. My ES and RUT targets to the downside were punched through for more than 10 points. I added couple of puts spreads in SPX and RUT around noon as I thought it was another one percent day. I also made a mistake of selling Oct 2 SPX 1800 by looking at earlier expiration day. It got filled above my price. I also added 2nd set in SPX and RUT for Sept 2 and 3. My SPY Sept 3 186 naked puts for scalp was proven to be too early also. I sold it at $46 around noon but it went to high of 74 with volatility above 18. At one point my margin went near 10% left. I had to close a SPX 1 put at $2.7 to raise it. I may have to close more tomorrow if the sell off continues.
My order to close wheat for Aug was filled not too long after the opening. I will see which way the trade will pin on expiration day tomorrow.
I will focus on raising my margin and reduce my risk tomorrow. The selling may not be over yet. We may be looking at a 8-10% correction.
US indices moved down overnight on weakness of globe markets and cruse oil. It's a gap down at open. ES, NQ are still within their current range while TF/RUT are below their weekly range. My targets for today are as follows.
ES: below 2053 O/N low, 2046 last seen of crime, 2038;
above, 2066 yesterday's low, 2075 gap fill;
RUT: below, 1189, last seen of crime, 1183, next CHVA;
Above, 1198, low of yesterday, 1203.7, gap fill;
I will be conservative on selling RUT puts, I will pick couple of 2nd puts in SPX. I would sell call on a meaningful pop.
Wheat held above $5.00 overnight and my last wheat puts for Aug was closed after open. I will see which way the market will pin on expiration tomorrow.
My execution:
Wow, what a sell off. All of the major US indices were sliced 2% or more. My ES and RUT targets to the downside were punched through for more than 10 points. I added couple of puts spreads in SPX and RUT around noon as I thought it was another one percent day. I also made a mistake of selling Oct 2 SPX 1800 by looking at earlier expiration day. It got filled above my price. I also added 2nd set in SPX and RUT for Sept 2 and 3. My SPY Sept 3 186 naked puts for scalp was proven to be too early also. I sold it at $46 around noon but it went to high of 74 with volatility above 18. At one point my margin went near 10% left. I had to close a SPX 1 put at $2.7 to raise it. I may have to close more tomorrow if the sell off continues.
My order to close wheat for Aug was filled not too long after the opening. I will see which way the trade will pin on expiration day tomorrow.
I will focus on raising my margin and reduce my risk tomorrow. The selling may not be over yet. We may be looking at a 8-10% correction.
Wednesday, August 19, 2015
Fed Minute 8-19-15
My theses and plan:
Indices futures pulled back to VPOC of current CHVA overnight. Market may retest Monday's breakout area while awaiting Fed Minute this afternoon. All indices gaped down at open. My targets are:
ES: 2093 (gap) and 2098 above; 2075 and 2063 below;
RUT: 1214.3 (gap) and 1217 above, 1201 and 1192 below;
I will stay out indices option selling until 30 min after the release of Fed Min. I will spend time to work on my wheat and corn positions.
Corn and wheat are holding up but no drastic price actions yet. I have one wheat position left for this month to be exited. I will double check to make sure no any other positions left in my holdings.
My execution:
Indices went through a N shape path with Fed Mins boosted a 1.5% down day to b/e briefly, then gave most of it back. ES/NQ and RUT closed below their break out points of Monday. However, they are all within their current balance area with somewhat bearish tones. I had 8 indices spread orders got filled. Some calls and puts were closed during the swings. I had couple of new, 2nd puts positions filled at closing.
Corn and wheat were still range bounded. My 470 wheat put was closed. I rolled over my wheat 490 with 50% profit. There is wheat 485 puts left which I found during my double checking positions. I will closed it tomorrow.
Volatility is up. I need to be more conservative. Be ware of seasonality of late Sept and Oct which often bring corrections. I may consider to sell more calls for that period when market pops.
Indices futures pulled back to VPOC of current CHVA overnight. Market may retest Monday's breakout area while awaiting Fed Minute this afternoon. All indices gaped down at open. My targets are:
ES: 2093 (gap) and 2098 above; 2075 and 2063 below;
RUT: 1214.3 (gap) and 1217 above, 1201 and 1192 below;
I will stay out indices option selling until 30 min after the release of Fed Min. I will spend time to work on my wheat and corn positions.
Corn and wheat are holding up but no drastic price actions yet. I have one wheat position left for this month to be exited. I will double check to make sure no any other positions left in my holdings.
My execution:
Indices went through a N shape path with Fed Mins boosted a 1.5% down day to b/e briefly, then gave most of it back. ES/NQ and RUT closed below their break out points of Monday. However, they are all within their current balance area with somewhat bearish tones. I had 8 indices spread orders got filled. Some calls and puts were closed during the swings. I had couple of new, 2nd puts positions filled at closing.
Corn and wheat were still range bounded. My 470 wheat put was closed. I rolled over my wheat 490 with 50% profit. There is wheat 485 puts left which I found during my double checking positions. I will closed it tomorrow.
Volatility is up. I need to be more conservative. Be ware of seasonality of late Sept and Oct which often bring corrections. I may consider to sell more calls for that period when market pops.
Tuesday, August 18, 2015
Follow Through? 8-18-15
My Theses and Plan:
Indices futures stayed up overnight despite 6% drop in Shanghai. ES may be moving to its next balance area if it close above 2108 today. It may also come down to auction some thin area it left yesterday. My targets for ES are:
Below, 2092 (o/n low), 2085 (edge of CHVA),
Above, 2105 (b/o O/N high) and 2112;
RUT is stocked in the mid of its CLVA of 1202 and 1231. It's weaker than SPX and NQ. I may sell more calls than puts. My targets for RUT today:
Below: 1216 and 1211;
Above: 1228, 1232 and move into CHVA if closes above 1233.
My plan is to sell both sides since it appears a choppy session. I will try to close more positions to lock in profit.
Grains lowered overnight. I will try to close my current month positions. It may get volatile again toward end of this week with some pining actions.
My execution:
No follow through in indices today. They were range bounded within upper part of yesterday. I only sold couple RUT Sept puts in my ET accounts. Perhaps market is waiting to read tea leafs of Fed Minutes tomorrow. I better to hold off my indices trades after the Fed minutes released tomorrow. I can spend some time to deal with my wheat and corn positions in the morning.
Wheat and corn are still weak. I had one wheat 460 exited. I need to double check my grains' positions tomorrow.
Indices futures stayed up overnight despite 6% drop in Shanghai. ES may be moving to its next balance area if it close above 2108 today. It may also come down to auction some thin area it left yesterday. My targets for ES are:
Below, 2092 (o/n low), 2085 (edge of CHVA),
Above, 2105 (b/o O/N high) and 2112;
RUT is stocked in the mid of its CLVA of 1202 and 1231. It's weaker than SPX and NQ. I may sell more calls than puts. My targets for RUT today:
Below: 1216 and 1211;
Above: 1228, 1232 and move into CHVA if closes above 1233.
My plan is to sell both sides since it appears a choppy session. I will try to close more positions to lock in profit.
Grains lowered overnight. I will try to close my current month positions. It may get volatile again toward end of this week with some pining actions.
My execution:
No follow through in indices today. They were range bounded within upper part of yesterday. I only sold couple RUT Sept puts in my ET accounts. Perhaps market is waiting to read tea leafs of Fed Minutes tomorrow. I better to hold off my indices trades after the Fed minutes released tomorrow. I can spend some time to deal with my wheat and corn positions in the morning.
Wheat and corn are still weak. I had one wheat 460 exited. I need to double check my grains' positions tomorrow.
Monday, August 17, 2015
Surge on Monday 8-17-15
Indices surged this morning after the 1st hour testing of last week's low. I don't know if there was any news driven it. I closed couple of bear calls since my margin is on the call side now. I also closed a 2nd set on put side, plus scaled a half of SPY. I will try to sell on both sides tomorrow depending on the directions of indices.
Grains were still trying to recover from the damages of last week's USDA report. I have to close my wheat positions for this month before this Thursday.
Grains were still trying to recover from the damages of last week's USDA report. I have to close my wheat positions for this month before this Thursday.
Saturday, August 15, 2015
Weekly Review 8-15-15
It was a normal profitable week with $1,600 profit only. The indices were still in range but vol was up to 15 with Yuan devaluation. Equities ended higher for the week on Greece's bail out deal approval. ES/SPX & RUT are still in the down channels within their current CHVA. RUT appears weaker than ES and NQ. I need to keep in mind of possible FED rate hike in Sept and seasonality of OCT.
Grains haven't recovered from the sell of after USDA's WASDE report. I didn't have much activity in this front. I will only keep a small, limited positions in grains until I am completely out of the market in options selling. Grains are more suitable for a trend play.
I am thinking about to take 50% profit on my put positions of two entries on each expiration period. My holding period has been longer (Avg 36 vs 22 days) in 2015 than 2014. There are variables in grains holding. The trading procedure may be like:
1. Enter a GTC order to exit 1/2 position at 50% profit after established a put positions;
2. Try to sell a 2nd set of puts with my rules of engagement;
3. Enter another GTC order for the rest of 1/2 position at 75-85% of profit if the order for the first half is executed or the 2nd set is filled.
4. Reducing margin is a secondary consideration on exciting both puts and calls.
Grains haven't recovered from the sell of after USDA's WASDE report. I didn't have much activity in this front. I will only keep a small, limited positions in grains until I am completely out of the market in options selling. Grains are more suitable for a trend play.
I am thinking about to take 50% profit on my put positions of two entries on each expiration period. My holding period has been longer (Avg 36 vs 22 days) in 2015 than 2014. There are variables in grains holding. The trading procedure may be like:
1. Enter a GTC order to exit 1/2 position at 50% profit after established a put positions;
2. Try to sell a 2nd set of puts with my rules of engagement;
3. Enter another GTC order for the rest of 1/2 position at 75-85% of profit if the order for the first half is executed or the 2nd set is filled.
4. Reducing margin is a secondary consideration on exciting both puts and calls.
Friday, August 14, 2015
Another Friday 8-14-15
I didn't write my morning again due to Alissa's early to school and my scheduled meeting with a lawyer. It was a choppy day and inside day for both ES/SPX and RUT. I was lucky as I opened and closed some spreads on both sides before I headed to the meeting.
Corn and wheat inched up but I didn't get any fill. I will close or roll my wheat positions next week as they are near expiration.
Corn and wheat inched up but I didn't get any fill. I will close or roll my wheat positions next week as they are near expiration.
Thursday, August 13, 2015
Follow Up 8-13-15
My plan and hypos:
ES stayed up overnight only to pull back to yesterday's upper range before open. It's back to the upper side of CHVA. RUT is back into its CLVA after hitting CHVA below yesterday. It may continue to fill in current CLVA.
My ES ranges are: Above: 2092, 2100, Below: 2073 and 2065;
RUT ranges are: Above 1219 gap fill and 1228 at upper CLVA; Below: 1202 and 1199;
I will try to close some calls on weakness and sell puts with available margin.
Grains are exploring directions after USDA shock yesterday. I will wait to see if we get a clear picture.
My execution:
ES hit my first down side target after open then bounced back. It didn't break above my upper target. RUT was weaker on both side and had a stronger sell off before closing. I didn't get any fill on either side. I closed some positions on both sides. It was a slow day overall.
Corn and wheat pushed up some but were not strong enough to change their trends. Today's export data was weak for most grains. I tried to sell some calls and rollover one Oct put. I didn't have any order filled. I will try again tomorrow.
ES stayed up overnight only to pull back to yesterday's upper range before open. It's back to the upper side of CHVA. RUT is back into its CLVA after hitting CHVA below yesterday. It may continue to fill in current CLVA.
My ES ranges are: Above: 2092, 2100, Below: 2073 and 2065;
RUT ranges are: Above 1219 gap fill and 1228 at upper CLVA; Below: 1202 and 1199;
I will try to close some calls on weakness and sell puts with available margin.
Grains are exploring directions after USDA shock yesterday. I will wait to see if we get a clear picture.
My execution:
ES hit my first down side target after open then bounced back. It didn't break above my upper target. RUT was weaker on both side and had a stronger sell off before closing. I didn't get any fill on either side. I closed some positions on both sides. It was a slow day overall.
Corn and wheat pushed up some but were not strong enough to change their trends. Today's export data was weak for most grains. I tried to sell some calls and rollover one Oct put. I didn't have any order filled. I will try again tomorrow.
Wednesday, August 12, 2015
Ripple Effects of Yuan 8-12-15
I didn't write down my plan today since I had to help June to load her staff back to her school.
Futures dropped sharply overnight on further decline of Yuan. US indices futures stayed below yesterday's low prior to RTH. My margin was tight so I didn't place many orders to sell puts. After testing the lower end of current balance area indices staged a turn around in the afternoon. All majors moved back to yesterday's range. I sold couple of calls in SYX and RUT. Now I am balanced in margins. I will try to close more positions to free up my buying power.
Corn and wheat dropped sharply after USDA report. Corn made a new low of current contract at 3.46. It closed back at prior low and may be forming a bear flag. Wheat is not too far from making a new low either. I will wait for a day or two to see where this market is going.
Futures dropped sharply overnight on further decline of Yuan. US indices futures stayed below yesterday's low prior to RTH. My margin was tight so I didn't place many orders to sell puts. After testing the lower end of current balance area indices staged a turn around in the afternoon. All majors moved back to yesterday's range. I sold couple of calls in SYX and RUT. Now I am balanced in margins. I will try to close more positions to free up my buying power.
Corn and wheat dropped sharply after USDA report. Corn made a new low of current contract at 3.46. It closed back at prior low and may be forming a bear flag. Wheat is not too far from making a new low either. I will wait for a day or two to see where this market is going.
Pull Back in Play 8-11-15
My plan and Hypos:
Chinese Central Bank announced to devalue RMB by 2%, the most one day move in several years. Indices futures turned down in reacting to the news. ES was down 15 points, 0.6% before open. VIX is up 7%. ES is still in its CHVA. There is a gap below at 2072 and a gap above at 2098. ES and SPX may be filling in this area for today. RUT gaped down but within in the CLVA. I plan to sell puts on break of overnight low for ES/SPX and RUT. Also try to close some calls and puts positions during market swings.
Corn and wheat gave back most of yesterday's gains and retesting their break out area. Trades are preparing for tomorrow's USDA report. It could go either way. I have orders in place to reduce my positions.
My execution:
US indices followed through the shock of Yuan devaluation. After indices futures broke overnight low I sold some puts for late Sept. Couple of my calls closed too. It was nice closing to the up side. However indices futures gave all gains back tonight after Asian markets open. Apparently the Yuan devaluation has much bigger impact than I thought. Is it a start of another round of currency war? Let's see what European market will bring tonight. I will observe my risk and be conservative tomorrow.
Corn and wheat gave back most of yesterday's gain. It appeared to be another clear deck swiping actions before USDA report tomorrow. I will not trade within the first hour after release of the report.
Chinese Central Bank announced to devalue RMB by 2%, the most one day move in several years. Indices futures turned down in reacting to the news. ES was down 15 points, 0.6% before open. VIX is up 7%. ES is still in its CHVA. There is a gap below at 2072 and a gap above at 2098. ES and SPX may be filling in this area for today. RUT gaped down but within in the CLVA. I plan to sell puts on break of overnight low for ES/SPX and RUT. Also try to close some calls and puts positions during market swings.
Corn and wheat gave back most of yesterday's gains and retesting their break out area. Trades are preparing for tomorrow's USDA report. It could go either way. I have orders in place to reduce my positions.
My execution:
US indices followed through the shock of Yuan devaluation. After indices futures broke overnight low I sold some puts for late Sept. Couple of my calls closed too. It was nice closing to the up side. However indices futures gave all gains back tonight after Asian markets open. Apparently the Yuan devaluation has much bigger impact than I thought. Is it a start of another round of currency war? Let's see what European market will bring tonight. I will observe my risk and be conservative tomorrow.
Corn and wheat gave back most of yesterday's gain. It appeared to be another clear deck swiping actions before USDA report tomorrow. I will not trade within the first hour after release of the report.
Tuesday, August 11, 2015
Back to Trading 8-10-15
I am back on my desk on this Monday after almost a week of absence.
My hypos and plan for today:
US indices moved up overnight with up movement of European markets. ES is back to the mid of its current CHVA after tested the lower edge. TF/RUT are in their CLVA appearing to fill in the pocket of 1200 to 1230. My targets for ES are: up to fill 2095 gap and 2105 to top edge of CHVA; Below 2074 for overnight low and 2065 to retest last Friday's low. RUT may be fill in its current CLVA as indicated above. My plan is to sell on both sides, more for RUT calls and fill in puts for my shorter term setups.
Trade is positioning for USDA Report on Wednesday. Wheat and corn moved up overnight. My plan is to reduce my positions before the report.
My executions:
Indices had one way drive to the upside. It was a 1+% closing day across the board. I sold calls in SPX, SPY and RUT in my accounts. I am balanced mostly with some spots to be filled in the put side.
Corn and Wheat had a big relief rally with +2 and 3% respectively. I sold some calls to strangle in my positions.
My hypos and plan for today:
US indices moved up overnight with up movement of European markets. ES is back to the mid of its current CHVA after tested the lower edge. TF/RUT are in their CLVA appearing to fill in the pocket of 1200 to 1230. My targets for ES are: up to fill 2095 gap and 2105 to top edge of CHVA; Below 2074 for overnight low and 2065 to retest last Friday's low. RUT may be fill in its current CLVA as indicated above. My plan is to sell on both sides, more for RUT calls and fill in puts for my shorter term setups.
Trade is positioning for USDA Report on Wednesday. Wheat and corn moved up overnight. My plan is to reduce my positions before the report.
My executions:
Indices had one way drive to the upside. It was a 1+% closing day across the board. I sold calls in SPX, SPY and RUT in my accounts. I am balanced mostly with some spots to be filled in the put side.
Corn and Wheat had a big relief rally with +2 and 3% respectively. I sold some calls to strangle in my positions.
Monthly Review July-2015
Another month of successful selling indices options without any adjustment or losses. My total profit including commissions but without interest and other fees is $13,300 in all of my accounts. Corn and wheat contributed to the total profit with several losses and rollovers.
Vertical spreads became my trade in indices. It requires much less margin than naked ones and gives me a peace of mind with limited losses. The down sides are higher commissions, smaller premiums and harder rollovers if needed. In my current under capital and fully invested conditions I will have to stay with this strategy until I recover from -$30,000 cash currently. In theory I have recovered 80% of my losses from last summer's big hit in grains.
I may consider to stop selling grains options. It's too volatile, trending hard and longer. I often get slapped on both directions since I hedge them. I need to look into selling bonds and Forex futures as alternatives. Both categories had thin volume for far OTM options when I tried them last year. I will check them out again and ask around to see how other people do it.
Vertical spreads became my trade in indices. It requires much less margin than naked ones and gives me a peace of mind with limited losses. The down sides are higher commissions, smaller premiums and harder rollovers if needed. In my current under capital and fully invested conditions I will have to stay with this strategy until I recover from -$30,000 cash currently. In theory I have recovered 80% of my losses from last summer's big hit in grains.
I may consider to stop selling grains options. It's too volatile, trending hard and longer. I often get slapped on both directions since I hedge them. I need to look into selling bonds and Forex futures as alternatives. Both categories had thin volume for far OTM options when I tried them last year. I will check them out again and ask around to see how other people do it.
Saturday, August 8, 2015
Weekly Review 8-8-15
It was a down week for indices. I had a group of ladies from China and was out most of the week. I placed couple of selling put orders and got filled one morning. I also traded for awhile in a later afternoon. The week ended with $2,300 profit without any loser nor adjustment.
I am thinking about to make 2 trades each week base on my two setups during the 45-56 days and 30-40 days time lines. The first set is targeted at 50-60 % profit. The purpose of it is to improve my rate of returns. I outlined the idea in my July monthly review. I may keep my PITM between 10-5%. I will start to experiment it next week since my guests are gone. I can focus on my trading now.
Corn and wheat shown some strength at the late part of the week. I will try to make adjustments to my positions before USDA report next Wednesday.
I am thinking about to make 2 trades each week base on my two setups during the 45-56 days and 30-40 days time lines. The first set is targeted at 50-60 % profit. The purpose of it is to improve my rate of returns. I outlined the idea in my July monthly review. I may keep my PITM between 10-5%. I will start to experiment it next week since my guests are gone. I can focus on my trading now.
Corn and wheat shown some strength at the late part of the week. I will try to make adjustments to my positions before USDA report next Wednesday.
Tuesday, August 4, 2015
Absence for the week 8-3-15
I will be in and out of the market for this week due to Jinquan's wife and her friends come in town. I may set up trades conservetively before and after market base on prior market conditions.
Saturday, August 1, 2015
Weekly Review 7-31-15
It was another all winner week in indices. My profit is $1,377. It was short of my goal of average $400-500 per day. One of the reasons was my absence from the market in late part of June traveling with Yinmore.
I continued to refine my trading. I expended my indices put spreads from 20 points to 30 points to get more premiums per trade while maintaining my probability ranking. I also started to exit my positions before expiration date in an effort to increase my capital efficiency. The down side is that my trading cost increases as well. So far the benefice has outweighed the cost.
I made twice of the same mistake of forgetting the minus sign this week. I felt that my mind was not as sharp as I expected. I should add an excises session during the trading hours and take couple real break. Also be alerted when I don't have a clear mind.
Corn and wheat have had no sign of revival. I didn't have much activities in that front. I have learned my lesson of not over trading nor reacting. I am still on the road of recovery from last summer.
I continued to refine my trading. I expended my indices put spreads from 20 points to 30 points to get more premiums per trade while maintaining my probability ranking. I also started to exit my positions before expiration date in an effort to increase my capital efficiency. The down side is that my trading cost increases as well. So far the benefice has outweighed the cost.
I made twice of the same mistake of forgetting the minus sign this week. I felt that my mind was not as sharp as I expected. I should add an excises session during the trading hours and take couple real break. Also be alerted when I don't have a clear mind.
Corn and wheat have had no sign of revival. I didn't have much activities in that front. I have learned my lesson of not over trading nor reacting. I am still on the road of recovery from last summer.
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