The majors stayed in a new range after the selloff last Friday. They didn't go lower as I expected. S&P actually recovered most of the loss after breaking out recent high today. The rate inversion didn't scare the market. The new round of the trade talk boosted people's hope. The Fed is backing the bulls.
The range bound market helped my portfolio. I was able to exit out five of my long puts and reversed an SPX short call to long put. The Clients' long puts of the week were exited out as well. The majors are expected to break out their current ranges soon. It's likely to the upside if the trade talk produces a positive result.
Net liq improved slightly to 120K before the 1.5K auto transfer to BOA. Leverage is still hanging around 5. Delta is on the negative side of it. Options value at -428K. I will be able to add a couple of long puts next week after today's exits. But I have to be strict about increasing side on rolling positions. I still don't have a good solution to drastically deleverage my portfolio.
Friday, March 29, 2019
Saturday, March 23, 2019
The Fed Confused The Market 3-22-19
The Fed FOMC announced that it would not raise the rate in 2019. The decision surprised many market participants. Most people thought the Fed would leave the rate hike option open for 2019 since the Fed was emphasizing on data dependent. The majors run up then sold off after the announcement. It was a typical ABC price movement. On Thursday the majors broke out to the upside on the Fed's dovish stance. They felt that the Fed is on their back. The bulls were cheering for the clear sky in 2019. Today the German and US PMI were both below their expectations. The market reversed direction to the downside. The selloff accelerated after European closing. SPX and RUT closed down 1.9 and 3.6% respectively. They were the biggest one day loses in 2019. RUT has been weaker than the other majors from the January rally. Is this the beginning of the 2nd shoe drop?
I had several long puts expected to be exited safely based on the breakout yesterday. I had to roll and reverse them on today's selloff. The new daily lows were made at closing. I made my adjustment based on Delta and the margin constraints.
Net liq was reduced to 110K. Leverage is back to 540. The danger is present and clear. I will work out a plan over this weekend.
I had several long puts expected to be exited safely based on the breakout yesterday. I had to roll and reverse them on today's selloff. The new daily lows were made at closing. I made my adjustment based on Delta and the margin constraints.
Net liq was reduced to 110K. Leverage is back to 540. The danger is present and clear. I will work out a plan over this weekend.
Friday, March 15, 2019
The Bulls Are Back Again 3-15-19
The long buying tail of last Friday played out this week. The majors reversed up on Monday and completely recovered from the losses of last week or even more except RUT. The bulls are back in charge now. SPX closed at 2822, a new high of 2019. Based on today's breakout, SPX has a target of 2880-2910 range. RUT is relatively weak after being faded out today. It could be pulled up by the others next week though. The daily MACD is turning up. Its resistance is at 1568-1578 range. The big event for next week is FOMC on Wednesday. The dovish Fed is the power behind this rally, I think.
I didn't reverse my positions from short call to long put earlier this week. My hesitation made my portfolio under pressure again. Luckily I was able to close each of my long put in SPX and RUT. My delta is ended negatively today. I will have to make some adjustments early next week, especially on RUT.
Net liq stayed in the same range of 110K. Leverage is still above 5.2. The improvement is much smaller than the price movement. The fate of my portfolio is at messy of the market. I don't like this kind of stress. My search for solutions of unwinding my positions has not resulted in anything. I didn't work hard enough. I am invited to do a presentation in options with a local Wechat group this Saturday.
I didn't reverse my positions from short call to long put earlier this week. My hesitation made my portfolio under pressure again. Luckily I was able to close each of my long put in SPX and RUT. My delta is ended negatively today. I will have to make some adjustments early next week, especially on RUT.
Net liq stayed in the same range of 110K. Leverage is still above 5.2. The improvement is much smaller than the price movement. The fate of my portfolio is at messy of the market. I don't like this kind of stress. My search for solutions of unwinding my positions has not resulted in anything. I didn't work hard enough. I am invited to do a presentation in options with a local Wechat group this Saturday.
Friday, March 8, 2019
The Tide Has Turned 3-8-19
The majors formed a bearish engulfing candle on Monday. The tide changed to the downside. This is the first down week of the majors in 2019. Today's NFP was 20K vs 180K expected. It was a big disappointment. The sentiment has changed to somewhat cautious. However, the majors didn't drop much during the early session. They even staged a recover before closing. Not sure if this pullback is so shallow.
I acted fairly early to reverse our long puts based on Delta. It's an improvement from these reactive actions earlier this year. Today's reversal didn't work out well. I thought the poor NFP number could cause a big selloff but it didn't happen. Late I guessed the reason may be that the bad NFP could make Fed stop rate hikes. Either way, I need to be more factor based.
Net liq is about the same level of 115K. Leverage is above 5. Only the quick risk reversal saved me from this selloff. I still don't have a workable plan to quickly deleverage my portfolio except taking big losses.
I acted fairly early to reverse our long puts based on Delta. It's an improvement from these reactive actions earlier this year. Today's reversal didn't work out well. I thought the poor NFP number could cause a big selloff but it didn't happen. Late I guessed the reason may be that the bad NFP could make Fed stop rate hikes. Either way, I need to be more factor based.
Net liq is about the same level of 115K. Leverage is above 5. Only the quick risk reversal saved me from this selloff. I still don't have a workable plan to quickly deleverage my portfolio except taking big losses.
Friday, March 1, 2019
The Restless Bull 3-1-19
The majors closed slightly lower this week. But the dip buyers are present. They formed a long buying tail on the weekly bars. Today's closing at top of the day is bullish too. RUT/IWM closed above its 200 MA today at last. All majors are above their 200 MA now. This may be the rarely happened V bottom. The 2nd shoe may not drop down for a while.
I finally made the long due to RUT risk versal today. It should have been done last week or early this week so I could have void another 10K wire. I was overly concerned about my low N.L. Who hesitated get hit.
Net liq is at 113K after another 10K wire from the sales of my IRA. Am I drained into a black hole like many other gamblers? Where do I draw a final line? I don't see any near term relief for my deep ITM positions on both sides. Would I be able to sustain another 5+% shock in either direction?
I finally made the long due to RUT risk versal today. It should have been done last week or early this week so I could have void another 10K wire. I was overly concerned about my low N.L. Who hesitated get hit.
Net liq is at 113K after another 10K wire from the sales of my IRA. Am I drained into a black hole like many other gamblers? Where do I draw a final line? I don't see any near term relief for my deep ITM positions on both sides. Would I be able to sustain another 5+% shock in either direction?
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