I got fooled when US futures didn't gap down last night. I didn't have a clear plan to hedge the down side as I was hoping to see an unexpected bounce. Well, hope is not a strategy. Futures got crushed after European market open. ES was already down 1.5% when I woke up this morning. I didn't buy any VIX or short ES as I was thinking during my weekly review. We saw another 2-3 % drop today only recovered half later afternoon. The selling appears not over yet. We may see an retest of January low for SPX before or after Yellen testifying on Congress. Nasdaq and RUT have done it already. Nasdaq gaped down below it today.
My focus was keep my risk on check and maintain my margin balance. I lost over 20K available fund since indices gaped down after open. Maybe because of my many put positions the 1:2 hedge wouldn't reduce my margin. I placed some sale call orders just to be ready in case a bounce. Some of them got filled in later afternoon. Now margin is back to the call side. I am glad I didn't release all of my call orders. These calls ate a chunk of margin when it got switched to the long side.
Risk factors increased. Net liq/bp ratio is down to 37%. It doesn't leave much room for me to add positions. Leverage jumped to 56. It was above 65 during the heat of selling today. I will reduce some positions in both side if we get a slow day tomorrow.
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