Like many, I was expecting a down day after the terrorist attacks in France last Friday night. Futures gaped down 0.5% on Sunday night. The selling of ES was rejected at 2000 last night. ES/SPX opened in the lower range of last Friday. My account was low in available fund and under margin pressure with some naked puts across all traded assets. My plan was to reduce margin with all means since it worried me the whole weekend. I was over exposed with only $5K available before open. I started to sell calls and buy long puts in the morning. After a rollover of Nov 4 1980 put to Jan 3 1820 the numbers improved.
I over traded today with 21 trades. Other than 4 of the 21 were closing positions the others were new positions and heavily on selling calls. I took on too much vega risk after SPX broken Friday's top. Now I am under pressure on the call side as some of positions are near the money. I placed orders to close them at small profit. I need to pay attention to puts too. Today's rally may be a relief rally of the over sold conditions from last week. I have noticed the engulfing pattern had not worked well in the past. The daily head and shoulder pattern is still in place. I will try to close positions in both calls and puts to reduce Vega risk.
Risk figures improved today. Available funds is at $44K and leverage is 32. I need to double the available margin to 50% to reach my goal. So my accounts can withstand an unexpected event which could happen any time. I can't rely on luck for too long.
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