Buy back IWM Aug 75 puts with IWM@72.0
Buy back SPY Aug 117 puts SPY@120.1
Stock market turns lower after a pop up at the open. I am reducing risk, and taking some huge losses on those positions. As I type, markets careen lower for a minute or two and now are stabilizing at lower levels. On the edit for typos, stocks are moving up off the lows. Seems like too many brave heroes are stepping into the breach, and that usually means lower.
As for yesterday's plan, it reminds me of boxer Mike Tyson saying “everyone has a plan, until they get hit in the face.” Ouch. -1600% on the IWM and -900% on the SPY puts, on the dollar value of the options. Writing naked puts can be a risky strategy, and when markets go straight down fast and volatility explodes higher, losses like that happen. Hopefully, I don't have many more of those as open positions, but I do still have some exposure. Taking those two losses doesn't mean the losing is done.
Thankfully, I had less than average exposure at the time of this tumble and didn't buy heavily into the debt ceiling rally, and didn't keep selling puts when SPY touched the 125 support level. So while the losses are terrible, traders that came in long two weeks ago and kept doubling down took a lot bigger hit, with aggressive put sellers likely getting margin calls. Of course, a few were short and made a ton, so overall the glass is three-quarters empty, but it could have been a cup of poison too.
Long GLD, SPY, TLT
No comments:
Post a Comment