Indices futures got knocked on their heads again. ES is trading at lower range of yesterday around 1938-48. VIX futures is above 25 again. Sellers are still in control.
I realized last night that I have too many naked puts from last round of rollover to reduce my margin. They are creating a bigger dangerous element if the market falls sharply again. My plan for today is to eliminate all of the naked positions:
1. closing,
2. roll it down and buy puts to protect;
3. buy long put directly to protect the positions.
4. reduce sizes and then buy long protection to make them into spread.
It was an inside day but major indices closed at high of the day. This week had a small gain. Overall it was an inside week and the bear flag is still there.
I followed my plan to reduce margin and covered most of the naked puts. The final count is from 12 naked puts to 3. With 50K available margin and 0.68 leverage I should be able to handle an normal drop on Sunday night and Monday. Unless something happens dramatically trade may stay in a waiting mode until FOMC Wednesday. I will continue to reduce my exposures next Monday.
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