Holding Down 11-29-16

Market had a choppy session but closed slightly up except RUT. SPX and RUT made attempts to go higher earlier then gave back most of their gains. RUT closed at yesterday's low and appeared weaker. SPX still holding its bull flag pattern or it could be forming a right shoulder if no previous high is taking out.

Only 2 trades today. Closed Dec gold 135  bear calls for $1. Bought a SPX 12/2 2255 call to reduce margin. No any other orders got filled. I have 3 near TM positions to close or roll tomorrow. Need to be patience and also decisive.

Risk profile stayed about the same as yesterday. I don't understand that the figures of initial margin and available funds changed quite bit overnight despite of a very small move of the market. Margin ratio dropped to 48% from 55%. No one seams really understand how the margin is calculated.

1st Relief in 2 Weeks 11-28-16

On this Monday after Thanksgiving RUT pulled back 1.3% after 16 consecutive up days. SPX also gave back 0.5%. It was a decent relief for my accounts. My main acct had a 15K relief which brought it back to the safe zone for now at least. MACD started turning down on daily.  RSI for RUT is still above 75 in the over bought territory. Let's see if we get a couple of follow through days to the down side.

Made 13 trades across all accounts including the two I manages for clients. I made some ICs in RUT put side. I rolled over GLD 112 puts from Dec to Jan 109. Also made more hedges to both side in Indices as I planed yesterday. I made a big mistake in rolling Dec 9 127 call by entering quantity 2 instead of 1. The total cost in all legs is more than $700. I will have to make a combo to exit these positions and recover the cost. I must be really stressed out! I need to get good rest and keep my head clear.

Risk profile improved from last end of last week. The 10K transferred from ET helped too. Net liq is above 136K including the ET transfer. Margin ratio is near 55%. Hopefully I can reduce couple bear calls this week.

Relentless Market 11-23-16

Every attempt of selling has been met by buyers in this rally. RUT made another new high of 1342 and booked its 14th up day in a row. Even Fed Minute release indicated the rate hike was around the corner couldn't make a dent on the market. The result is that I am pushed one more step close to the edge. I lost another 5K in net liq. It has about 9K cushion left in my portfolio. It's true that the biggest draw down is in the future.

Made 9 trades with 4 rollovers in call side and the rest of them were closing puts. They didn't help much in reducing margin and risk. I made 2 entry errors today. Such mistake hasn't happened for a long time. I must be stressed out without realizing it. I need to regroup and get my head clear on this Thanksgiving Day.

Risk profile is worsening. Net liq is down to 119K. Leverage is up to 166. Both set the worst on my record. Margin ratio of 47% is better for the time being. The post expiry predicts a lower ratio for next week. I need to call IB on Friday or Monday to clarify Net liq and margin relationships and requirement.

The Risk I Didn't See Before 11-22-16

All US major indexes made another new high today. A early push down in SPX was met with buyers again. It's a relentless bull market. The squeeze made me realize that I could face a net liq draw down to below portfolio margin requirement issue. I may be forced to liquidate some of my bear call positions to meet the requirement. With another 1% surge in RUT and IWM my net liq is down another 9K to 123K. Simply hedging margin wouldn't bring net liq up. I set 110K as my line in the sand. I will have to buy back positions to reduce my risk.

Made 13 trades. I took a big hit on realized losses although collected premiums during the rollover process. I need to get couple bear calls off my book. There are 11 RUT, 3 IWM,  5 SPY and 1 SPX calls ITM as of today. It's a matter of survival again.

Risk profile is on alert now. Net liq was discussed above. Margin ratio is dropped below 40%. Tomorrow will be a tough day if the market continue to push up. I will try to roll out more positions and looking for ways to reduce my side even if it's temporarily.

New Highs For Major Indices 11-21-16

It was a renewed upward push on Monday. RUT booked its 12th consecutive up days. SPX closed its all time high of 2198 on high of the day. It appears there is more energy to go further which is showing in ES on the evening session. We may see a gap up tomorrow morning. It's more and more like the surge after Britexit. Hope the market will take a breath or get a turn around Tuesday.

Made 7 trades today. I took a 10K hit on the rollover of RUT 1105 call. There will be a bigger one when I roll 1140 call. I am paying the price again for my undisciplined actions again. This is 2nd draw down during 2016. I sold another SPX 2280 call for 12-30 in both Lao Dong and QII acct. I should have waited after the break out. I will work adding more hedges tomorrow.

Risk profile continues to deteriorating.  Net liq dropped another 5k to 133K now. Margin ratio is down to 45%. I really feel the heat and frustration. Need to keep my head cool and focus on disciplined action.

Be The Leader You Would Follow 11-21-16

Every serious trader is a leader, running a trading business.  Would you want to work for the business you're creating?  Would you follow yourself as a leader?  Would you allocate your hard-earned money to someone who manages their trading the way you do?  Inspiration follows from aspiration: We are most energized when we live up to our highest ideals.  -Brett Steenbarger

No Relief Yet 11-18-16

RUT made another new high at 1316. It booked its 11th consecutive up days. Most of my rollover are ITM again. It's the Briexit all over again. My assumption of "it won't happen again" was wrong. SPX took a breath before challenge it's all time high of 2191.5 made in Aug 23. I will wait to see the reactions after it makes a new high. Would it follow the suit of RUT or not?

I made 2 trades, exiting SPY 219.5 for today before heading to Clemson and rolled up RUT 1290, Dec 2 to 1310 C for Lao Dong. None of my hedge orders was filled. I will try again next week. It's going to be the Thanksgiving short week. I need to do my rollover quick.

Risk profile is further pressured with RUT's relentless advance. Net liq is down to 138K. Margin ratio is at 47% after some hedge positions expired today. I will have to build it back tomorrow.

The Bull Flags Played Out 11-17-16

The bull flag pattern of SPX and RUT played out today. It didn't shake the market when Yellen testified in Congress implying rate increase was near. RUT made another new high of 1313 today. SPX closed at 2187. It's only 7 point away from its all time high of 2193.8. We may see it to touch or break it by tomorrow. The more important is how it will close.

Made 9 trades today. I rolled 2 of SPY 2185 Cs as they were traded around. I continued to roll over my ITM RUTs. It resulted in 6K losses. I am sticking to my plan of rolling ATM and ITM positions instead of waiting for near expiration. So far I could use the protective longs to offset part of the losses. Some of the put positions were closed which help me to add more for the rollovers.

Risk profile still above my safe line. But Net liq looks ugly. It got to the lowest level of 141K. Margin ratio is down 10 points to 54%. I may have to do more hedges tomorrow. Staying small has helped me to weather the risk this time so far. However I was too concerned about the down risk and paid less attention to the upside before the election.

Choppy w/ Bull Flags 11-16-16

Market went into a choppy mode as bulls and bears played a tagger war. SPX and RUT closed within +- of 0.2%.  On daily charts SPX and RUT are holding their bull flags while B bands made room to the upside. It's likely that both will continue to push up. ES made a all time high over night during European session. Assume the trades want to see what's behind the new high.

Made 6 trades today. Most of them were ratio hedges and rollovers. Closed SPY 218 call 1 hr before expiration. I was spooked by the 3pm pushing into 218. So I moved my exit price from 3 to 8. I made money but it was an emotional trade. It ended up closing at 1c. My plan was to exit between 8-10c. So which part of my action is correct? Have few more close out or rollover to do tomorrow.

Risk profile stayed relatively healthy. Net liq is still my concern due to the number of positions ITM or near ATM. I didn't collect much premiums in the last two days. My effort was mainly on risk controls. Margin ratio is at 64% while leverage is above 110. How are they correlated?

Melting Up 11-15-16

Market continued inching up. Dow and RUT already made new highs. SPX is less than 10 points away to make its all time high while NASDAQ is 140 points behind. It's more and more like the pattern of Britexit now.

My portfolio is under further pressure as the melt up continues. I made about 25 trades for the last three days. More than a half of them were rollovers in different combinations. Of these under water positions in RUT, IWM and SPY, luckily my protective long calls made money to offset my losses for the rollovers. But the number of such long calls are running out. I was able to close some put positions then it switched margin to the call side. I will have mid week rollover for SPY tomorrow. Expect the indices to squeeze up.

Risk profile is mixed in comparison with last Aug. Net liq is down near 25% to 143K in a week of time while gross position value increased about the same amount. This is not good for option selling strategy. I am just waiting for couple of down days to give me some relief. Fortunately I am still collecting premiums on each trade. Margin ratio is still above 50% most of time. It closed at 55% today which leave me some room to breath and roll some positions around.  I will continue to hedge the call side and deal with my risk day by day.

A Day of Follow Through 11-10-16

Indices gaped up again this morning. The gaps got closed early and buyers stepped in to push the market higher. RUT closed up 1.6% following yesterday's 3% gain. SPX was only up 0.2% while QQQ lost more than 1.3%. New highs are insight for SPX and RUT. What's after new highs may give more clue. Are we going to see another Brixt sustained surge?

Made 10 trades today. I was busy to defending my ITM bear calls. I rolled over these ITM positions based on my rule of engagement. These directional calls helped out as I sold the profit ones and bought more protections further out on dates and kept some small premiums. Over all, I am pressured again with more ITM and ATM bear calls. I am eating my own bite fruits again. Luckily my positions are smaller than the Brixt and last Aug. It appears a year end draw down is under way unless we see a quick turn down after new highs.

Risk profile is mixed. Net liq is hit again with another 16K. It's down to 166K from Nov high of 199K. Margin ratio is up a little to 52% with my heavy hedges today. I have couple more SPY ATM positions to roll tomorrow depending on what market directions we get tomorrow. Right now it appears that bulls are still energized.

Wild Election Ride 11-9-16

Index futures down 5% before mid night when Trump appeared winning the election. I heard it on radio on the way back after dropped Alissa off in Clemson. I tried to trade ES CS and Strangles but ES was limit down already. No prices could be entered below the limit price. I didn't have a clear strategy. In hide sight I am glade I couldn't do it. The market pulled back slightly below the day's closing. Recovered almost 4 of the 5%. Then SPX and RUT advanced 1 and 3% respectively before closing. Over all it was a 6-8% round trip in the last 24 hrs. SPX and RUT are firmly in the higher part of their previous balance area.

I made 4 trades on the Election day which was a choppy day. I closed couple positions on call side and entered ratio hedges in both side of SPX. Followed my plan well. There were 7 trades today. 3 of my RUT & SPX puts were closed due to the surge. 2 of the SPY & IWM long calls were filled for more than 100% gains. My SPY 115 call expiring today looked safe in the morning then it was squeezed by noon. It was pushed ITM before my action plan starting by 2pm. I had to make 3 different trades to roll it out with less premiums. In a sense I followed my plan of what time to execute.

Risk profile fall below boarder line slightly due to today's surge. I am still heavy on call side. Net liq is down 10K and gross position is up 8K. Margin ratio is at 47.5%. I think I have survived the down side risk of this election. The risk is now on the call side. The Christmas rally may be starting from the end of election, along with some pull backs. I need to plan my trades accordingly.

FBI Rally 11-7-16

FBI indicated there was no new issues discovered on Clinton's email on Sunday afternoon. Index futures gaped up around 1+% on Sunday night. There were far from closing the gap on Monday session. In fact, all major indexes closed above 2% mark. SPX has clearly moved back into the balance area of last July to Oct while RUT is parked below the range.

Made 8 trades today. Most of them were hedges and closing positions. I only made a IC 2 in SPX Dec 1 which I was about 1% early. I estimated a 1 % move but market ended with a 2% gain. My plan for tomorrow is continue to reduce and hedge my risk.

Risk profile is still above my requirement. Margin ratio is at 61% while net liq dropped slightly due to the upside movement.

VIX Set A Record For Number Of Up Days 11-4-16

The NFPR came out slightly below expectations but still adding over 160K jobs for Oct. Market responded to the report with positive opens. Until 2pm, sellers started showing up. It played out as a pump and dump day. SPX turned to red from +0.6% while RUT held a 0.6% gain giving up about 1%. VIX logged its 8th up day, setting a new record for number of continued up days. I made another attempt to buy VXX on early pull back but didn't get it. We may see VIX continue to surge as it has not reached last Aug high yet.

I made several bear call spreads to form IC for my Nov and early Dec positions during the up move. I need to watch out a possible V shape bounce after the Election day. I am still weak in planning during market's volatile movement. I tend to be more responsive and enter a trade in the heat moment. On my put hedge of SPY 203 long, I planed to hold it longer into the election day in case of the surprise sudden drop. During today's up thrust I was afraid of losing value so I entered another order at 50% profit target and it got filled during the down thrust in the last hour of trading. I altered my plan and lost the protection. It was a profitable trade but still a wrong trade. I had to enter another risk reversal one more week out at 193 but double the bear calls to collect some premiums. It increased too much of my risk on the bear call side. I may be threatened on the bear side if the market surges after the election. A lesson must be remembered.

Risk profile weakened due to the down side movement. Net liq decrease 1K to 197K while Initial M poped 11K to 86K. Margin ratio is down to 56% from 62% instead of my plan to increase the ratio. I have next two days to reduce my exposure and increase my ratio. I need to focus and stay disciplined to make it make it work. My target is to get the ratio to 65% or better before the election.  

The Fear Continues 11-3-16

Market tried to lift itself up this morning but sellers kept knocking it down until it broke yesterday's low and slide down the hill. Although the losses were less than 0.5% for both SPX and RUT but they have booked 6 and 7 day continued losses. VIX logged 8th up days which set a record. There are still rooms to the down side. It's 2040 area and 1130 area for SPX and RUT respectively. They may be saved for the election shocks.

Made 4 trades today. They were hedges and rollovers. I made a double wing butterfly in SPY with 2 longs of 203. I then set a scale out order to exit 1 at 50% profit. It got hit in the afternoon. It shows how VIX is affecting option price. I have couple positions in SPY and IWM near the money. I will have to close them or rollover tomorrow.

Risk profile is down a little. Margin ratio is at 62% while gross position value increased 4K. I need to add couple ratio hedges in the big contracts tomorrow to sustain the possible election shock.

FOMC - A None Event This Time 11-2-16

FED held interest rate unchanged as expected. It didn't stop the market continue to decline. RUT and SPX lost 1.26% and 0.64% respectively. Both of them are firmly below their Oct balance areas and heading into their summer ranges. With the election only a few days away the market is in an uncertainty mode.

I had only 1 trade today since I didn't want to add any bull puts to increase my leverage and risk. My corn Dec bear call hit my exit price. A surprise was with my BABA put spreads. It had a better than expected earning report this morning and its price popped near 4% to 103 in pre market. By the afternoon it lost almost 2% and was dragged to a total of - 3.7% after FB ER with a 8% drop. My 95 put spreads was from a sure 100% winner to a possible loser if it drop near 95 tomorrow.

Risk profile didn't change much. Margin ratio is at 65% while net liq is near 200K. I will try to add more hedges and roll out some put positions tomorrow.

VOL Is Up 11-1-16

On the day before FOMC it was expected to be a choppy, range bound market. Indices took a dive of more than 1%, then recovered about half before closing. VIX went up more than indices and parked at 18 now. I tried to buy some VXX but didn't get fill. FOMC tomorrow may push VIX around even more. I will try again.

Made 7 trades today. 3 of them were exiting positions. 2 were rollovers and 1 ratio hedge. I entered my first SPX Monday expiration trade for Nov 7, a day before expiration of 2050/2000 put spread. It wasn't a very good timing. VEGA risk is too high. For the most part I held off adding any new put positions to preserve my buying power. BABA will report its earnings tomorrow morning. It kept going down since I entered my 95/90 put spreads. I am a little uncomfortable but will stick to my plan of expiring or rolling.

Risk profile stays at a healthy level. Margin ratio is at 69%. I will try to reduce my positions further to make my margin ratio to about 80% before the Election day when and if I can.