US indices ended with the 5th up weeks. The gains were smaller and Friday ended with a bearish engulfing. However, the engulfing pattern has worked for me for the last several times. The uptrend is still in place with overbought condition. Hopefully we will see a temporary pull back.
My week ended with negative realized return about $20K again. I continued to use Tyler's approach to roll over my ITM positions and collect premiums. I roughly received 0.8% of cash but didn't reduce my call positions and margin pressure is still building. IB is implementing a new method to calculate margin risk which is going to squeeze my available funds further. I have to reduce my call positions next week to meet the new requirement.
Lessons learned this week:
1. Keep calm and focus on implementing the my strategies and plan. I waited until the expiration day to roll my ITM positions without getting too anxious. My roll over produces positive cash flow partially due to the pop and the dump on Friday. I need to fine tune my rollover approach. Do I close it first or open it first? That's often my dilemma.
2. Implement Tyler's rollover strategy with all major aspects. I rolled and collected cash but I didn't reduce my ITM size. Therefore no risk and margin were reduced. With IB's new margin calculation I have to reduces my size on Monday. I must keep my risk exposure to the safe level in order to make this system work.
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