Monday 16th March

Emergency rate cut by the Fed again, 50bp, down to 25bp. Smells of desperation.

Lost some money on UB but panned out.

Trades:

ESTX50, FTMIB, N225, K200, Z

All sales, all futures.

Options markets now getting very illiquid. No quotes in OOM puts in most things including SX7P, the Euro banks index.

Bought a 3000 strike gold option, a year out. $400 premium. 20% IV. Well, placed the order!

Trade (11:25):

BTP.

This pushes margin req’mt to $436K.

12:23

In this game, one learns all about liquidity and opportunity costs. Now find that there are no out of the money puts to be bought for love nor money. Thank goodness I bought some on TSLA. I now feel so confident about making money on this stock … well, by shorting it, anyhow. This is probably the time to wind down my position. The twin emotions of fear and greed facing me at this juncture, as always.

12:54 sold HG. 1 Fut.

18:15

Absolute mass of closeouts and trades.

Closes:

Big wins: TSLA puts, HYG puts, EMB puts, EWT puts,

Stops: ESTX50, UB.

OPENS

Basically, a list of futures, and shorting UB. Bought some more further out of the money puts.

It is now very difficult to buy out of the money puts on single name US stocks, country ETFs and euro sector indices.

It feels as though the market is gradually losing liquidity. Presumably, all the margin calls are in and there fewer and fewer forced sellers.

The good thing is that the hitting of limit orders on RUT and TSLA puts has dramatically reduced the margin req., down from ~$435K to now $358K. I did buy some more puts with the extra “buying power” generated but at some point the market is possibly going to spring back. SPX has lost around one third of its value from the ATH a month ago.

19:19

Decided to buy some puts on LQD - investment grade ETF. Bonds are the next frontier. Govt. bonds still going up, high yield down. Where will high quality corp. credit go? Down, I’m guessing. Obviously.

Wrap

Finished the day something like $280K up. A great day! This is the point of maximum danger. My good luck is lulling me into the delusion that I have perfect foresight. This will make me take more risks which will end up with me losing everything. God give me strength to resist temptation and not stray from the path of righteousness and tight risk controls.