A Big Turnaround Week 2-25-22

 This week is a volatile week with big swings in both directions. The tension between Russia and Ukraine finally became a full-scale war. Putin lied when he said he had no plan to invade Ukraine. On Wednesday SPX closed at the Jan 24's low. It was a really bearish posture. Then the Russian invasion started late that night. The futures market tanked. ES reached the one-year weekly range low of 4100 area. I was deleveraging my LPs to SCs. The majors started to recover the next morning. It was a big reversal day. SPX turned around from -2% to +1.5%, a total of 186 points, 3.5% round trip. I got slapped in both directions. 

IB Netliq is down 45K from 143K to 97K.  The leverage is up to 548, the highest level since the Covid plug of 2021. The realized P/L is -$17654. But IB made a margin close of $36,160 during the big drop on Wednesday. So my cash is down $32,206 for the week after the $5K ITM collection. It was a total disaster week for me in which I made all the mistakes and broke my rules. I was over-exposed in both directions. 

The 0 DTE in my personal account continues to perform well with some scary moments during the volatile week. It collected $1,532 for the week. I had to buy some hedges due to the large daily swings, but they mostly worked out.  

The lessons learned this week:

1. The same problem of no stopping enforced;

2. Oversized positions when I try to reduce one side but added two on the opposite side;

3. Lack of recognizing and control of my emotions, especially during volatile times. 

Yes, The Second Shoe Is Dropping 2-18-22

 The majors booked another down week with the Russia-Ukrian tension and a hawkish Fed. They all are back into their downtrend and below their 200D MA. It looks like they may retest their breakout area in January. It's hard to tell if Russia invades Ukraine. Things may fall out of bed. So far the price movement is still following the seasonal pattern. 

The IB Netliq is slightly down (-1.2K). The leverage is still at 330ish. The realized P/L is $21K with a $17K gain of rolling the RUT SC back in January.  The collected cash is -$415. I spent over $1K in hedges and boosted short-term margins. It's the part of the $72K I collected from last week's hedges that increased three of my SPX SP positions. I plan to spend part or all of the premiums to reduce the account's margin. I am doing fine so far. 

The small accounts produced $947 cash with the 0 DTE system. It's $1000 less than last week since I reduced the sizes and missed a PUT SP due to the high volatility. 

I started to place stop orders this week. Although none of them were triggered, it's a good start. I found that using debit spreads as a hedge combined with stop orders works in this volatile environment. 

Next week's tasks:

1. Set stops in every new position; 

2. Deleveraging and reducing risks as much as I can;

3. Reverse positions according to the trend and delta;

4. Trade with the trend. 

Is the 2nd Shoe Dropping? 2-11-22

 The majors reversed the rally mood in the last two days of this week. The risk factors are: the January inflation number is higher than expected; Fed speakers are more hawkish on interest rate hiking; The increasing Russia and Ukraine tension. Seasonally, there is likely another leg down in mid of Feb before the market turns up. The key is how to survive this downturn? It could get worse with these risk factors above. 

The IB Netliq is at $145712, down 10K from last week excluding the 10K borrowed from ET today. The available funds are much less since I mishandled the long positions. I have 3 more long positions in SPX due to the sudden drops in the last two days. The leverage is back above 3.33. The realized P/L is -$690. I had many small wins and the long put spread hedges helped. But these 3 short puts in SPX drained a lot of my B/P. These long hedges helped to collect $9250 cash. 

The personal accounts performed fairly. They collected $1570 for the week. I shouldn't have traded in my TOS account as I plan. I am not familiar with its order entry system. I lost $300 in it today since it won't allow rolling options in the last 15 min of the trading days. I need to be more cautious when the VIX is high. 

My biggest problem is still the stop orders. I must get into the habit of placing stop orders right after I entered a position. I can easily recover a 2x or 3x loss. It's much better than rolling with 4 plus times losses which drains a lot of my B/P. I took a couple stops last week which didn't feel too bad. 

Lessons learned this week:

1. Stay disciplined. I broke my rules by adding more positions and not placing stop-loss orders. 

2. Be quick to change my bias when the market condition changes. Plan to take action with the new market condition. Don't be like a deer standing in front of headlights. 

Next week could be another rough week as the price action and seasonality indicate. My plans are: 

1. deleveraging; 

2. take stops; 

3. trade with the trend; 

4. reverse positions when needed.  

Volatility With Earnings Swings 2-5-22

 The majors continued volatile swings with some buying activities. VIX is hovering around 24. The big tech earnings affected the mood of the market. FB lost 26% in one day while AMZN gained 14% after the ER. The futures swung 1% up and down overnight and back to normal in the RHS.  All four majors closed in the green for the week after 3-4 weeks in the red. It's a sign of improvement. However, they are still in the downtrend in daily and weekly charts.  They could be building a new balance area. My view is that the market is exploring a new acceptable value area with the inflation and rate hiking economical reality. 

My IB Netliq closed at $155K up from last week's $139K. The leverage is down to 328 v.s. 372 of last week. The realized P/L is $21K, which only recovered 1/4 of January's loss. There is a lot more work to do for a full recovery. The IB ended with -$1.5K cash due to the 80 shares of TZA. There will be a $2K cash from the SPX long put spreads ITM settled over the weekend. The 0 DTE in my small accounts continued to perform well. It realized a $1.3K profit for the week excluding the $350 from Monday, Jan 31. 

Looking at the current charts and the seasonal pattern, the market is not out of the woods yet. We may have one more volatile week ahead at least. I was able to reduce one SPX short put from Jan and moved one RUT short put to the end of Feb. Many of my short calls expired on Friday. I took two stop losses for the week. One was a 1 DTE IF and the other one was an SPX put. I am glad I did regardless of the end result. I entered a further out PS to recover part of the stop loss. 

I am thinking to trade the 0 DTE in IB account when the PB is allowed since the strategy is working for the other accounts. I will study it further to refine the setups. I just have to follow my hedging and stop-loss rules.