The majors booked their fifth positive week. The much-expected sellers and retest of the recent lows have no signs of it. This Tuesday's 1-1.5% drop was fully recovered by Friday with a strong trending up day. It's an overbought market technically speaking. Of course, the market can stay in extreme condition for a long time. Earnings season may have provided some support for the bulls. FOMC of next Wednesday could be a catalyst for the market.
My holdings are pressured further on the long side this week. I wasn't aggressive enough in adjusting my delta. I thought Tuesday's pullback was the beginning of the selloff. But there was no follow through. I have noticed that adjustment often came at the late cycle. I tend to be more reactive than proactive.
My net liq is below 100K again on this Friday. It recovered on Tuesday's selloff after the MLK long weekend. I made a couple adjustments but my delta stayed below -100 throughout the week. Options value got pushed above -400K with an increased number of positions. I will have to wire my last batch funds in on Monday if the majors go up again. I need to be more aggressive in adjusting my positions without increasing the total count. I am going to look for other methods to survive.
Saturday, January 26, 2019
Saturday, January 19, 2019
The Raging Bull 1-18-19
The bulls kept pushing up mainly on the China trade talk news. Despite some earnings disappointment, the majors booked another week of gains. SPX passed its 50% retracement while RUT is approaching it. The majors are in overbought conditions based on RSI and MACD. They could continue to push to extremes just like the oversold conditions last December. The retest of the recent lows may be delayed.
I tried to adjust our holdings based on the deltas. But didn't get any pullback for the last 4 days. I only reversed one RUT from the bear call to bull put and some split rollovers. Deltas are still slightly in negative readings. I wasn't aggressive enough although previous experiences taught me differently.
My net liq closed below 100K at 98700 during the 1% pop on Friday. I should have reversed one more position from bear call to bull put last Thursday despite the 1% pop. I tend to guess or hope the next move of the market is in my favor. This unrealistic tendency has cost me dearly. I am starting to think the two opposite possibilities and form my plans accordingly.
I tried to adjust our holdings based on the deltas. But didn't get any pullback for the last 4 days. I only reversed one RUT from the bear call to bull put and some split rollovers. Deltas are still slightly in negative readings. I wasn't aggressive enough although previous experiences taught me differently.
My net liq closed below 100K at 98700 during the 1% pop on Friday. I should have reversed one more position from bear call to bull put last Thursday despite the 1% pop. I tend to guess or hope the next move of the market is in my favor. This unrealistic tendency has cost me dearly. I am starting to think the two opposite possibilities and form my plans accordingly.
Friday, January 11, 2019
The Revenge Rally Continues 1-11-19
It was a week of revenge rally. The SPX and RUT booked five consecutive up days. The majors parked near the December break down areas. A typical retest point. Sellers are likely to step in. VIX and its futures are below 20 now. Would there be another VIX surge?
My portfolio is pressured on the bear side. I kept waiting for a pullback to adjust my bear call positions but didn't get any meaningful one. It has happened to me during the previous rallies. I had to step in to split rollout some bear calls to reduce my negative delta since my net liq reached the warning line in the last two days. I made delta adjustments for my clients as well. We are still slightly delta negative since I believe another leg of selling will come. It's likely to retest the lows of last December. Hope it will hold there. A V shape bottom is possible but not likely given the slowing economic growth and trade tensions. The earnings session has come with many warnings so far.
Net liq is down to 108K. Leverage is at 513. It's my average at low 400s. My net ITM positions increased for RUT and 3 for SPX due to rollings. I have to monitor the size very closely.
My portfolio is pressured on the bear side. I kept waiting for a pullback to adjust my bear call positions but didn't get any meaningful one. It has happened to me during the previous rallies. I had to step in to split rollout some bear calls to reduce my negative delta since my net liq reached the warning line in the last two days. I made delta adjustments for my clients as well. We are still slightly delta negative since I believe another leg of selling will come. It's likely to retest the lows of last December. Hope it will hold there. A V shape bottom is possible but not likely given the slowing economic growth and trade tensions. The earnings session has come with many warnings so far.
Net liq is down to 108K. Leverage is at 513. It's my average at low 400s. My net ITM positions increased for RUT and 3 for SPX due to rollings. I have to monitor the size very closely.
Saturday, January 5, 2019
Recovery In 1st Week Of 2019 1-4-19
The majors closed up sharply this week. SPX and RUT are up 4% and 5% respectively with over 3% pop today. Both of them reached their Fib 38.2% retracement from ATH. The recovery may still have room to go up to the 50% RT. It was still wild price actions. Daily movements of 1-3% were normal with VIX between 30-22.
My trades were mainly reacting to the market movement. I have been tracking my options positions and their delta daily. Try to keep them balanced. Hedging the positions is still very costly.
My portfolios are somewhat stabilized. Net liq is 117K. The margin ratio is barely above 30%. The leverage is below 5. There was only one RUT put off the list. The short calls are under pressure with recent recovery. My focus should continue on limit positions and reduce risk.
My trades were mainly reacting to the market movement. I have been tracking my options positions and their delta daily. Try to keep them balanced. Hedging the positions is still very costly.
My portfolios are somewhat stabilized. Net liq is 117K. The margin ratio is barely above 30%. The leverage is below 5. There was only one RUT put off the list. The short calls are under pressure with recent recovery. My focus should continue on limit positions and reduce risk.
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