RM's occasional market calls...

[Rearden Metal]

What was the percentage hit you took on liquid net worth if you don't mind ? What is your avg risk per trade in percentage terms? I ask to benefit those who may be following calls so they don't blow themselves up or keep adding into the abyss.

I guess I can answer that one.
I dropped 6.6% of my entire trading account on that trade, which was over a third of my 2014 YTD gains.
Results notwithstanding, I actually still think it was a +EV trade going in.

 

[Blotto]

The CME website says there's no daily price limit on hogs.

You must have missed my post yesterday, written for the benefit of those with no earthly business punting pork, but who might be tempted to try to be you for a day.

Impossible today. Daily price limits of 3 cents a pound. 109.85 is the upper limit.

April contract is pigs born last Sep/Oct? So not too much porcine diarrhea losses?

I know nothing about pigshit so won't be trading this one.

Paragraph from George Horace Lorimer's "Letters from a Self Made Merchant" comes to mind:
When I sell futures on ’Change, they’re against hogs that are traveling into dry salt at the rate of one a second, and if the market goes up on me I’ve got the solid meat to deliver. But, if you lose, the only part of the hog which you can deliver is the squeal.

(full text at Gutenberg: http://www.gutenberg.org/files/21959/21959-h/21959-h.htm)

Nowadays, the CME contract is cash settled. Good luck RM.

Reduce size here at 111.30. My first loss of this thread was bound to happen eventually. Even Michael Jordan lost the occasional game here and there.

You're an old pro and know the score - take the hit and move on. Sharia happens.

 

[Zr1Trader]

I guess I can answer that one.
I dropped 6.6% of my entire trading account on that trade, which was over a third of my 2014 YTD gains.
Results notwithstanding, I actually still think it was a +EV trade going in.

Thanks much. Also IMO good move to realize the mistake and gtfo today. Arguably the best trades aren't the winners they are taking the loss before it does unforgivable damage to the account. You'll recover just fine.

 

[Low Salubrity Thug]

Results notwithstanding, I actually still think it was a +EV trade going in.

Agreed. The market dynamics at the time of entry pointed strongly to a drop to 105.5. Was a valid trade even though it turned out horribly.

Still seems an overreaction to me, even taking the latest PED data into account, as the slaughter count for 2014 so far is down ~0.5% but market weights are up ~2.5%. This latest pricing is indicative of a fall of ~10% in supply!

It would appear that the big ags players know something we don't...

Rumour has it a few of the locals were positioned the wrong way today as well and felt some serious pain. Likely to be some unhappy people drowning their sorrows down on Wells tonight.

 

[Scaleout.Scalper]

Lesson here is we never really know 100% the outcome of a trade, so there should never be thoughts of "full leverage" or "betting the ranch type of plays", no matter how good you are, and it's obvious RM is very good.

Thanks for the journal and the calls, a rare gem.

 

[drownpruf]

Oh, you're right! Thanks! Maybe I shouldn't mention it here, but I'm putting some size back on (short) right here at 111.50. To be exited by the end of the day, no matter what happens.

The synthetic went off well above limit yesterday and now another limit move... update?

 

[Maverick74]

The synthetic went off well above limit yesterday and now another limit move... update?

These things can go limit for days. There is no out unless you want to pay up for the synthetic which I'm sure is much higher now. These types of trades can literally relieve both a trader and his clearing firm of their assets.

 

[drownpruf]

These things can go limit for days. There is no out unless you want to pay up for the synthetic which I'm sure is much higher now. These types of trades can literally relieve both a trader and his clearing firm of their assets.

Yeah sucks, that's why I am asking as the synth was over a cent higher so there was no out on his add yesterday. Globex is just off limit again today at 114.6.

 

[Maverick74]

Wait a minute. Am I doing the math right. He is short 1000 cars? At $400 a cent and it's limit up at 3 cents higher. He dropped 1.2 million on the open?

 

[drownpruf]

Wait a minute. Am I doing the math right. He is short 1000 cars? At $400 a cent and it's limit up at 3 cents higher. He dropped 1.2 million on the open?

I don't think he ever mentioned size. RM stated he was down "five figures" in it yesterday on the first limit move (08.30 entry). He added, took some off and then re-entered short.