this thing did not move by 30% my friend,
now if you were playing UVXY, different story (which is what I have been playing)
China has 5 trillion to throw at any slowdown.
And believe they will as they DO NOT want social unrest!
This is just a yearly fear selloff and not based on reality!
s&p futures dumping will be the next fear trade as investors panic as they lose a quick 40 %
Got to be honest. Friday morning I was short 300 calls. I covered 100 of them. Even having 200 I was close to being wiped out, and possibly over 100% loss instead of 33%. That's how thin it can be. It looks like the biggest xiv draw down was 80% in 2011, which I guess we could see it at 10, and svxy at 20, what an opportunity that would be.
Hope I make it back, feels bleak right now. I definitely was caught by surprise that the UVXY 95 calls, with only 25 days left to expiration, were $40 when UVXY was 70 on Monday. I ended up covering at average of $13.50. They'll be $3 tomorrow, and obviously will expire worthless now. I just choked, and covered them on a panic. For about 10 minutes, when they were at $40, my account showed 100% loss. I was concerned it could go the other way, they could hit 50 and then without question my account would be liquidated with negative balance and I would really be in deep trouble.
It looks possible we get a shot under 25 on XIV, not likely but possible. If I can just hold my nose, I know it will be much higher in 10 years, and I can indeed hold for 10 years if I can make myself. If I got all in at 25 and left it there, I would be made whole at 37.50. Of course my account is emptied out right now but knowing myself like I do, I suspect I will fund it again.
It's not so much the selling of those calls as it was just not looking at what that size could do if say UVXY hit $100, or heckeven $60 as you could see.
You've gotta know those numbers to see the risk you were putting yourself in.
If you can't afford to hold a big move then you're sized too big. Scale it down or hedge it somehow.
I'm certainly short uvxy calls (Dec, Jan) here but i also know what UVXY at $100 would do. And why could it not go to $150? I mean i do not think so, but still you have to know if you could last that far.
Sure 33% loss is tough to take. I am sure everyone reading this has been there. It's not death. You will recover. Yes it sucks bad.
I'd say we're all smarter for these moments but empirical evidence tells me we're not. lol. Oh the human condition.
Oh don't you know it. That was a disaster.
A 'decent' short-vol opportunity (not in hindsight) Friday close, and then you wake up to a limit-down market Monday morning. There was no way out at that point for those flying too close to the sun. They were instantly DOA. This is exactly how it can and will happen. We all would do well to remember this.
I was impressed to say the least.
I will say we're firmly entrenched in the short-vol trade here. Who's to say what the short term brings but we do know we'll look back upon this time-frame as either "the" time to enter or 'the start' of the time. Who's gonna quibble about 50% here or there from here? lol.
Thanks Jack, it's definitely helpful to keep perspective. I know without question some people trading UVXY lost over 100% Monday.
What kills me is how stupid it was. I mean, I sold UVXY 95 calls for something like 30, 40 cents and bought them back for $13.50. A loss of over 3000%! The stupidity of selling calls could never be more clear. And it was not money I could really afford to lose. It was about 8 years worth of living expenses and now I'm in a real mess to find something to do that will pay the bills while I decide if I'm going to try to get back on the horse.
But, like you said- I "only" lost 33%. In times past I would have been in heavier and certainly ended up owing the broker money to close the account- I don't have it, so I have no idea what even would have happened. I guess they would have garnished my wages or something.
Perhaps the hardest thing about it is having lost 33% during a week when the market was up.
It sounds like while you had some frustrations, at least you didn't have bad losses, just missed profits, which I know still stinks but it sure beats the alternative. I have a scary feeling I'll end up opening my account back up at some point. But one thing's for sure, I absolutely will not sell calls again. Collected 6K in premium, bought them back for 270K. You have got to be kidding!!!
China has 5 trillion $ to throw at any slow-down problems!
The last thing they want is social unrest and a democracy rallies like Hong Kong recently experienced!
Draghi printing trillions to get Europe into America;s good economic condition!
Golf for what its worth, if I could reverse all the mistakes I have made in the market I would be a much richer man. That includes this past week, I had some options go out worthless on Friday that would have been massively profitable on Monday morning. I had not replaced the position since I knew they were going to lose and figured it was time to move on and not lose twice.
I also had some options as protection on an underlying that opened massively lower Monday morning. My options did get purchased in the panic, so instead of selling them at $50 (around the opening price of the etf) I sold them at $10 when things returned to normal. All in all I was sick to my stomach all day.
Longer term I have been positioning myself out of US equities for the past two years. Have to tell you that leaves me feeling pretty stupid as the markets I sold marched higher while the markets I purchased dropped lower. Even though I plan to hold theses positions for years and buy more as they drop, right now it sucks a lot.
Wish I could say never again will I suffer this heartbreak, but that would be lying to myself. Hang in there, take a step back. Monday morning there were people who lost 100%+++ some of them will never be back, you weren't one of them.
All the best.
Wasn't just greed, it was stupidity, first in selling naked calls, then in panicking and covering them when there was no need. Would've been smarter to be 100% long xiv, that way at least you can hold on. Nothing can be said, a 33% loss in a great week for the market cannot be forgiven. All I'm left with is desperately hoping for an unexpected quick death sparing me the guilt of suicide. It seems like people who want to hold on are the only ones blessed with accidents.
When you do not know what the #$%$%% is going on crying manipulation is par for the course.
Go ahead and complain, it is free. Just in case, you may want to look in the mirror and stare at the ignorant idiot that is the cause for your problems!
Complaining will not help you one bit
Gentlemen my knee jerk reaction closing my account was too quick. Need 50% gain to breakeven, xiv probably will be 50 again soon so buying under 26 was a no brainer. I doubt it will go under 26 again.