A Week Of Turn Around 11-30-18

The majors have made a big turn around this week. SPX and Nasdaq booked five consecutive days of gaining. RUT had 4 out of 5 positive days. Fed Chairman softened his tone on the rate hiking which gave the market a big boost. The trade talk summit this weekend also gives the market hope of easing tensions between China and the US. However, there will be a big selloff if there is no positive outcome from the summit.

My big surprise was that the AMZN got assigned on Wednesday morning. I planned to split the one bull put to two in hope of scaling out a little quicker and rollout to avoid possible assignment. It was an intense experience. There are some good lessons learned. I will not trade large cap stock options that I can't afford to get assigned. I will take stops when and if the plan calls for it. I also made some adjustments in my portfolio to stay afloat under margin pressure. My patience paid off today. I was able to exit 4 near the money positions which helped to deleverage my portfolio and recovered $17,000 losses. Spent another $230 to hedge for next week. Hope I will get a couple more positions off my back next week.

My net liq is $130K after sending 5K back to ET and paid myself 1.5K first time this month. The margin is below 50% for the first time in the last two weeks. The leverage is below 4.0.

Retest Oct Lows 11-23-18

The market continued to the downside despite the Thanksgiving week. There was not any cheering felt in the market. Any meaningful bounce was sold at end of the day. The majors, except Nasdaq, are very close to retesting their Oct lows. Nasdaq was already below its Oct low. The next targets will be April and Feb lows. There may be a bounce at these low points but not sure if they will hold for the longer time frame.

My portfolio is under further pressure from last week as the selloff continued. I had to wire transfer another 10K in when the majors gapped down on Tuesday. That added my total wires into 55K during the Oct selloff. I had to spend more funds to hedge since VIX stayed elevated above 20. I plan to take off 1-2 ITM positions to reduce my margin requirement and add them back when the market condition changes. It may be more effective and less expensive than spending $200-300 week on hedging. I need to not increase my ITM positions as margin relief.

Net liq is at 115K. Margin ratio is dangerously below 30%. Leverage is at 456. My main job is to keep my account afloat so I will have a chance to recover. 

A Week Of Bottoming 11-16-18

The market tumbled during the first three days of the week.  It filled the two gaps left during the midterm election rally. But it hasn't retested the Oct low. It rallied the last two days of the week, mainly on trade war news. VIX popped and dropped. It was news and Twitter-driven market. There is a divergence between the price action and MACD. MACD is on a down slop while the price bounced for the last two days. We may see price rangebound for a few more days. Bullish seasonality may come in play after Thanksgiven.

Made a lot of trades for this monthly expiring week. The high VIX put pressure on my margin requirement. I spent perhaps 1/3 of my premiums on hedging cost. It's a matter of survival. I added 7 ITM bear calls during this selloff. The $45K borrowed capital is not enough to cover the margins. I may have to spend some real money to buy back a couple of positions.

Net liq is at 116K and available funds are at 24.5K. Leverage stays at 4.6. The portfolio is on a shaky ground. I will continue to look for ways to unwind some positions before the year-end. The Two DTE experiment has worked out so far with 3 tries. This is a mid-range VIX play. Will continue to use it when the condition is right.

The Week of Turn Around 11-2-18

The majors dropped further on Monday, Oct 29. But the fresh lows were met with buyers. It made buying tails. Then, it comes the turn around Tuesday. The majors had 3 consecutive revenge rallies. Apples slightly lower than expected ER stalled the market today. It was also a trade talk news-driven week. A better than expected NFP report may be interpreted as a supporting evidence for Fed to raise the rate in December. The mid-term election will be another market event next Wednesday night.

My portfolios got slapped around. I kept hedging on both sides. I had to spent about a half of the premiums I collected to shore off the changing margin requirements. A total of $45K was brought in to save my portfolio during the Oct selloff. Now I reversed 5 positions ( 3 RUT and 2 SPX) from bull puts to bear calls. Now they are underwater deep ITM. I reversed one SPX back to bull put today. There is not enough margin to do more. I may have to wait after the mid-term election to be sure the trend is clear.

Net liq is bouncing around 115K. The weekend expiring is often showing red lines.  Don't have many positions offline soon. Leverage is at 475.

I am learning a short-term (1-2 days) Iron Condor for SPX. I paper traded it twice and so far it appears OK. If that works it may add some premiums for me.