The Pullback Before The Election 11-2-2024

 I missed two weeks of my weekly reviews although I thought it was only one week. I was stressed and disappointed with my performance during the two weeks. I was worried about how I survive the deep drawdown. The margin limits in both accounts restrained my ability to adjust my DITM positions when SPX held above 5820. The major indices finally broke down this week. SPX lost the 20 DMA support and closed above the 50 DMA support. It lost 1.5% this week and booked the second consecutive losing week. The uncertainty of this election finally kicked into the market sentiment. The election result could last days or weeks before it is settled. 

IBQ Netliq is up 19% from 88468 to 99452. The realized P/L is -17201. The collected cash is $4285. The options' value went down 1% from 509K to 496K. I made a big mistake by closing Nov 1 5475 SC for $41.4K on Oct 14. I couldn't reenter the position because of the margin limit. I was totally stressed out and tired that night. It was a devastating blow for me. The delta is down from -149 to -50 with the market pullback. The leverage is down 13.5% from 789 to 683. It's still dangerously elevated. VIX is above 20 into the election week. The total positions are C6-1 and P7+0. I made 42 trades that cost $150 in commissions this week. I didn't add any 1-1-2 trade due to the election uncertainty. I didn't have much gains in directional trades. 

IBQ had another big losing month in October. The realized P/L is -52600 rolling out these DITM SCs. The collected cash is -$38,136 including the error close of SC 5475 for $41K, +-$8.5K stop loss. It was a disastrous month.   

IBP got some relief from the pullback this week. The netliq is up 10K from 133K to 144K. SMA is up slightly from 7.8K to 9.4K. It's from the narrowing of the SC spread and collected cash. They could disappear again if SPX rallies again. There are 5 SCs and 4 SPs currently. I couldn't exit any SP due to the pullback. The cash collected is $1039. The realized P/L is $9447. Both cash and P/L offset some losses from previous weeks. I traded 2 put lottos with 3x returns. I still have strong FOL emotions in directional trades. 

IBP lost -$14,121 in realized P/L in October. The cash collection is -$9,203. I had to pay cash to roll the 5 SCs daily for most of the month. The call spreads are stretched. 

Lessons and Plans:

1. Enforcing stop losses is still an issue for me. I have to have stop-loss orders ready in IBQ before the market pullback. IBP has an SMA limitation. 

2. My stop-loss rules are A. Take 3X losses if the premiums are less than $1000; 

                                        B. Take 2.5X losses if the premiums are between $1000 to $1800;

                                        C. Take 2X losses if the premiums are above $1800.   

3. Recognize my big drawdowns accurse when the trend changes and I don't have stop-loss orders in place. 

4. Spend more time on how to hedge the election volatility. It's going to be a big week with the election on Thursday and FOMC on Wednesday.  Sometimes doing less is better than doing more when the emotions are high.