portfolio adjustment

I sold one contract of RUT Apr 480 call at 1.9.

I bought 2 contracts of RUT Apr/May 390/380 put at 6.9.

Debit today : 690x2 - 190 = 1190.

Total debit for the portfolio (excluding commission) = 2190.

New position

i just bought 5 contracts of RUT diagonal 460/480 call at a debit of $2.0.

Total debit to the account : $1000

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closed positions on rally

I closed all my RUT APR calls today. I sold Apr 480 call at $2.77, and bought back Apr 490 call at $2.5.

Overall i made some money with Russell 2000 position this month. In hindsight, I made too much adjustment to reduce my risk and that in turns reduced my reward.

Current position:
1. No Russell position.
2. shorted SPX March Quarterly 575 put

No adjustment

I was out this morning and missed the chance to get out my RUT Apr 480 call. I will wait next Monday and see how it goes.

unwinding position

I closed RUT 370 calendar call at $6.60 this morning, resulting a loss of $295 for each contract, and i also sold RUR MAR 440 at $0.30 as well.

A gap up in the morning is the best case for me to close the April call options.

Unwinding the long position

Market is usually quiet before Fed meeting. I am so surprised that the market was so strong at close. I closed some APR 480 call at $1.0 this afternoon.

1. RUT MAR 370 call : ratio -1
RUT Apr 370 call : ratio +1

2. RUT MAR 430 call : ratio -0.25
RUT MAR 460 call : ratio -0.5
RUT APR 480 call : ratio 0.75
RUT APR 490 call : ratio -0.25

Position adjustment

I sold 20% of RUT Aug 480 at $1.1 this morning. Now my two positions are:

1. RUT MAR 370 call : ratio -1
RUT Apr 370 call : ratio +1

2. RUT MAR 430 call : ratio -0.25
RUT MAR 460 call : ratio -0.5
RUT APR 480 call : ratio 1.0
RUT APR 490 call : ratio -0.25

and I am delta neutral.

Out of fuel?

I was out till 3:00 pm. When i looked at the screen after i returned, it showed a lack of buying strength. It is very reasonable for a Friday session. The buyers have already committed in the last 2 sessions, and the short sellers have covered.

This is the first week that the market has a positive return on a weekly basis after a long decline. This news should have a psychological impact on retail investors. What will they do?

I don't know and i care less. I looked at my own position and adjusted. I sold RUT Mar 430 call at $1.05.

Currently i have 2 positions separately managed:

1. RUT calendar 370 call : No adjustment was made for this position.

2. RUT MAR 430 call ratio: -0.2
RUT MAR 460 call ratio: -0.4
RUT Apr 480 call ratio: 1.0
RUT Apr 490 call ratio: -0.2

Another trend up day

Today it is another trend up day. The market is strong but with lower volume. ES was above VWAP all day since 10:00 am. It was the sign that the buying strength was coming from retail investors and short cover.

Tomorrow is an important day for reversal confirmation. If DJX goes up another 100 points, it is likely that we won't see another lower low in March.

The calendar position looked well this morning but the gain has disappeared by the end of the day. The position was a neutral position with slightly positive bias, but the market was too strong today. Adjustment has not been made yet. Lets see what happens tomorrow morning.

Daily comment

The market started with bullish run, but failed to sustain. Overall the market is sideway as expected.

SPX stayed at around 720, a level of resistance. To sustain the rally, SPX needs to stay above 715 tomorrow. I am neutral-biased for one day, but I think the market might fall again next week. Lets see what happens tomorrow and we will devise the plan.

The calendar position looks well. I should give myself a good score for "sideway" expectation.

calendar for short term

Longed RUT calendar 370 call at a debit of $9.55. I expect a sideway or smaller rally in the next 2 days.

bottom fishing with too tight stop

longed nq this afternoon at around 2:37 pm at 1046 near the bottom of the day with a very tight stop at 1044.5. Got stopped out within 10 seconds.

This was a good trade for bottom fishing, but the stop was too tight. Although the stop was put near the bottom, it was too tight considering the 1-min range was 2.5 points at the time the trade was entered.

I should set a wider stop for bottom fishing!

gross profit: -1.5 points today.

e-mini day trading

Today I started day trading e-mini again. Unlike trading options, there is no historial evidence that i can make money with trading e-mini.

For the purpose of developing multiple strategies to make money in this market, I think it is a very good idea to trade e-mini intraday while trading options for a longer term.

NQ (Nasdaq 1000 future) seemed weaker today, but i expected a reversal before close. Expecting a sharp reversal at around 3 pm, I longed NQ at 1046.5 at around 2:55 pm. A sharp reversal didn'tcome and so at 3:05 pm, i covered it back at 1047. The reversal came after 3:30 instead. Too bad that i was out and didn't catch the 3:30 reversal.

Gross profit +1 point.

trend down day

This is a classic trend down day without any leadership.

I covered part of RUT Mar 460 call at $0.1. Tomorrow is likely side-way or 50%rebounce.

Current position:
RUT Mar 460 call ratio : 0.4
RUT Apr 480 call ratio : 1.0
RUT Apr 490 call ratio : 0.2

position adjustment

sold 40% more RUT Mar 460 call at 0.45, and sold 20% of April 490 call at 0.7. Trying to achieve 2:1 short long ratio.

After the adjustment, i have:

short Mar 460 call ratio 1.4
short Apr 490 call ratio 0.2
long Apr 480 call ratio 1.0

real estate investing

With historical low mortgage rate, it might be a good time to buy a house or move up. Why would i say that when many economists are predicting further decline in home price?

The cost of owning or holding a house is determined mainly by the mortgage rate, and not by the price of the home. With the current rate at around 5% for 30 years fixed mortgage loan, the monthly payment is affordable for most people. Nobody can predict the top. Nor anyone can predict the bottom. If you can predict the future with certainty, just buy or sell the real estate derivatives offered from CME. For most investors like you and me, we don't really know the future.

Lets look at the math here. When I bought my first home in 1997, the rate was 8%. Lets compared the monthly payment for a loan of 5% and another loan of 8%.

The monthly payment for a 30 years fixed loan of $100,000 at 8% is $733.76, and the monthly payment for the corresponding 30 years fixed loan at 5% is only $536.82. A loan amount of 75,000 at 8% will give a monthly payment of $550.32. What does it mean?

Lets assume it is a 100% loan for buying a house to simplify the argument here. Suppose the house price will drop another 25% and the interest rate will increase to 8% 2 years from now, your monthly payment to buy a home now is still lower than the monthly payment if you will buy it as 25% lower price 2 years later.

Of course this is a simplified argument. Investing is dynamic, meaning adjustment should be made when environment favors proper adjustments. Real estate investing requires proper adjustments such as cash out, refinance and pyramiding. Consultation with financial experts in this area will help you building wealth with real properties.