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magic journal of doom
- Thread starter magicz
- Start date
Early action today but JRCC is already up 2 points and I am not getting a good price for the strangle at all, so I cancelled the order and will wait until an hour before the end of day and see how thing shake out. I still want to hedge the down side risk but not at an unfavorable price.
IV also went down about 20% this morning.
IV also went down about 20% this morning.
I could not get my strangle at a reasonable price since the stock keep moving up(which is good), I had to keep readjusting my order but did not get a fill. I have it on queued for tomorrow.
After another hour or so of modelling my risk and deciding what to do with my hedging. I decided my account margin is not adequate for holding both the vertical and the hedging position without a margin violation if there was a sudden 10% jump in the underlying to the negative or positive side. This scenerio is possible with the volatile nature of the stock at this time. Therefore, I decided to loan this account an extra 15K to cover the possiblility of a margin violation if it happen. I will deposit the full 15K by the end of the week. Once this position is unwind I will remove the 15K from this account during or at the end of the month.
I will not be using the extra capital and margin to open any other position. So it wont affect the true return of this account. this is only an insurrance for a black swan move in the position I have open currently. Which consist of the 80,60 put vert and planning to add the strangle as a hedge. These two position is still under the max margin by 2.5K but it doesn't give me insurrance for black swan even stated above.
After another hour or so of modelling my risk and deciding what to do with my hedging. I decided my account margin is not adequate for holding both the vertical and the hedging position without a margin violation if there was a sudden 10% jump in the underlying to the negative or positive side. This scenerio is possible with the volatile nature of the stock at this time. Therefore, I decided to loan this account an extra 15K to cover the possiblility of a margin violation if it happen. I will deposit the full 15K by the end of the week. Once this position is unwind I will remove the 15K from this account during or at the end of the month.
I will not be using the extra capital and margin to open any other position. So it wont affect the true return of this account. this is only an insurrance for a black swan move in the position I have open currently. Which consist of the 80,60 put vert and planning to add the strangle as a hedge. These two position is still under the max margin by 2.5K but it doesn't give me insurrance for black swan even stated above.
I offered my little brother(16yo) a trading account for him to learn how to trade for the summer and keep any money he made from it. Though the account is not big(2K) but its enough for him to learn about trading without the risk to his money. I hope he takes my offer and do something usefull over the summer instead of playing games everyday on the PC. He's a smart kid and I am sure he won't lose all of it because I'll be giving advice if he choose to take them.
He ask me what he need to research or read, I told him any beginner book on trading is good. They all say the same thing which is risk management and dont over trade.
He ask me what he need to research or read, I told him any beginner book on trading is good. They all say the same thing which is risk management and dont over trade.
finally sold 15 80,50 Strangle @3 earlier today. JRCC is down about 9% today but my hedged position is holding up very nicely even though I am 2K in the red at this time. My margin have only moved about $300. Which mean I am in a very good position margin wise, if the stock doesn't go behold the 50 strike. I might not have to deposit the 15K extra after all, I'll reassess this tomorrow to see if I will need that insurrance. I still have 2.2K in available margin, down from 2.5K after I sold the strangle.
Been a little busy the last couple of days going looking at a few houses in Huntington beach. My JRCC position is holding up well considering it was at 62 beginning of the week and 55 as I am writing this. Although I am in the red right now, I don't see a reason why I have to micro manage this anytime prior to my previous time table of 7/7/2008. I expected this move at some point this month and anticipated the margin requirement need to maintain a +-10%move so my account is still very liquid with 16K free margin.
News today that JRCC bought an extra reserve of Coal for 40 Mil. This will increase the production capacity of 550K tons of coal per year and are unpriced. the stock initially jumped 4 points but is down to 2 point at mid day. The market is up today and the coal sector is up as a whole so far. I am revising my expectation for JRCC from the low 80s to mid-low 70s by July expiration. The high can still reach or exceed 80 but the probability is fairly low at this point. I had consider rolling the 80,60 vertical put over the weekend but with the news this morning I will delay any adjustment to next Monday as planned
Some play in this month that I will take on my other accounts,
FDA events on VNDA and THRX.
LEH is ready to go to 15 or lower. rumors are out there. where there is smoke there is fire.
Also JRCC close at 58.69 almost a 4 point gain and 1 point off from the intraday high. looks like its closing the gap from last week possibly by Thursday.
FDA events on VNDA and THRX.
LEH is ready to go to 15 or lower. rumors are out there. where there is smoke there is fire.
Also JRCC close at 58.69 almost a 4 point gain and 1 point off from the intraday high. looks like its closing the gap from last week possibly by Thursday.
status quo today, whipsaw action on the market end up flat. Nothing look interesting so far. I enter a few long term position on another account. As for JRCC, it had more moves then Paula Abdul but ended up flat. I don't expect any big move eihter way until at least Tuesday or Wednesday of next week due to the long weekend. Volume is still high, which mean the players are still placing their bets. Volume on the call side is more prevalent all week. This could be a bullish set up leading into expiration if hedging is done with the underlying.